This is a fascinating article on insurance costs and climate changes’ impact on pushing home insurance rates higher, but not just in high-risk areas. The NY Times reports that while states like California and Florida face premium hikes due to wildfires and hurricanes, other regions also see increases.
The Council on Foreign Relations notes that California’s recent wildfires wiped out 25 years of insurer profits, leading companies like State Farm to exit high-risk markets. This spread of risk drives up rates broadly.
WUSF reports that many areas are underpriced for climate risk, causing insurers to raise premiums widely. This impacts homeowners even in less vulnerable regions.
Real estate investors must consider these trends as rising insurance costs and coverage issues can affect property values and returns.
Reference: Flavelle, C. (2024, July 8). Home Insurance Rates in America Are Wildly Distorted. Here’s Why. The New York Times.
