The Looming Cost Of Climate Change: Home Insurance Premiums On The Rise

A recent study from PolicyGenius found that quoted homeowner’s insurance premiums increased by 21% nationally from May 2022 to May 2023. Florida experienced the largest jump with premiums increasing by 35%. The steep increases in homeowner’s insurance costs contribute to the already intractable housing affordability crisis, as homeowners must allocate more of their incomes to their monthly housing costs.

Natural Disaster Risk Drives Up Insurance Costs

When State Farm stopped offering new policies in California, they blamed wildfire risk and construction costs for their inability to operate profitably in the Golden State. Farmers Insurance has pulled out of California and Florida and pointed to hurricane risk as an explanation for exiting Florida. As climate change increases the severity and frequency of natural disasters, more homeowners and homebuyers will likely lose coverage or face increased insurance costs.