Across the United States, homeowners are facing higher premiums and fewer options as insurers raise rates or withdraw from areas with growing climate and weather risks. That retraction is changing communities from Southwest Florida, slammed by Hurricane Ian in 2022, to California’s wildfire zones and hail-prone towns on the Great Plains.
The trend reflects several forces: rising disaster losses, more development in hazard-prone locations, and higher rebuilding costs. Migration toward coastlines and forested places has placed more property in harm’s way, while inflation has pushed up the price of construction materials. A Treasury Department report released in January found that between 2018 and 2022 home insurance costs increased about 8% faster than overall inflation.
Insurers are shifting those mounting losses onto policyholders. As Carolyn Kousky of the Environmental Defense Fund notes, “We’ve seen growing prices everywhere.” The result is a squeeze on household budgets already coping with higher food and transport costs. Most homeowners with mortgages must carry insurance, and landlords commonly pass higher policy costs on to renters.
This is not just a coastal problem. Longstanding troubles on the Gulf Coast have accelerated: Florida’s rate of insurer nonrenewals rose about 280% between 2018 and 2023, according to a 2024 Senate Budget Committee report. California has been hit by major wildfire losses and insurer retreats. Meanwhile, parts of the Great Plains now pay up to 45% more than the national average for property insurance, driven in part by soaring hail damage. The Insurance Information Institute estimates hailstorms caused roughly $160 billion in home damage nationwide in 2024.
Local examples underscore the range of impacts. In Cozad, Nebraska, a severe 2024 hailstorm caused about $100 million in damage to a town of roughly 4,000 residents. After the storm many homeowners and businesses saw policies canceled or received sharp premium increases. Nebraska now has the country’s highest average homeowners insurance cost—nearly $6,400 this year, about $4,000 above the national average, according to Bankrate. “It’s just becoming unaffordable in our state,” said agent Josh Tapio in Omaha.
In Southwest Florida, homeowners face rising prices for both homeowners and flood coverage. Floridians paid nearly $5,800 on average this year for home insurance, making it the third-highest state average and about $3,350 more than the national mean. Realtors warn that these insurance pressures could force some fixed-income retirees and middle-class owners into foreclosure when they can no longer afford ongoing carrying costs. Research from Florida State University found that a 10% increase in homeowners insurance was associated with a 4.6% drop in home prices in one study, illustrating how insurance costs can weaken local markets. In Lee County, home values fell sharply after Hurricane Ian, showing how insurance dynamics can depress sales and equity.
Financial-market observers warn of broader consequences. David Burt of DeltaTerra Capital says that if home values decline widely to reflect insurance realities, mortgage defaults could grow—potentially raising borrowing costs for homeowners nationwide.
One clear avenue to reduce future losses is mitigation: retrofitting homes and altering landscapes to cut vulnerability. Lake County, California—hit by nine damaging wildfires since 2015—is pursuing neighborhood-scale ‘‘hardening’’ projects. Efforts include removing flammable bark mulch and replacing it with gravel, sealing vents and gaps, upgrading roofs and gates, creating fuel breaks, and improving evacuation routes. The county is participating in a state and federally funded pilot that clusters improvements so groups of homes are less likely to ignite and spread fire.
Yet residents in Lake County still face a grim insurance outlook. Policy cancellations there have outpaced many other parts of the state, and many depend on California’s FAIR plan, which sought a 36% premium increase. Insurers sometimes offer modest discounts for individual retrofits, but community-scale work often doesn’t translate into lower rates because insurers lack consistent, trusted data on the effectiveness of those measures.
Industry consultants and risk analysts say better data and transparency are essential for rewarding mitigation. Nancy Watkins, a consulting actuary at Milliman, is helping launch the WUI Data Commons, a database intended to aggregate community and landscape wildfire projects so underwriting can reflect reduced risk. Privacy concerns, standardization, and insurer participation remain barriers, but proponents argue that clearer information could create financial incentives for communities to invest in resilience.
Experts stress that insurers should more actively incentivize preparation through better rates and clearer signals that mitigation lowers risk. Without stronger incentives and reliable data demonstrating risk reductions, many communities will likely keep facing higher premiums, fewer available policies, falling home values, and the broader economic strain that follows.
Reporting by NPR teams across the country documented rising premiums and nonrenewals in Florida, sharp cost spikes in Nebraska following hail events, and community hardening work in California that has yet to bring widespread insurance relief. The emerging picture is of an insurance market adjusting to climate-driven losses—and in the process reshaping who can afford to live where and what communities must do to remain insurable.
NPR’s Ryan Kellman and Robert Benincasa contributed reporting.