- Natural disasters such as hurricanes are becoming more and more destructive due to climate change.
- Homeowners everywhere are feeling the impact as home insurance premiums skyrocket.
- Here are the 13 states where home insurance premiums are expected to rise the most in 2024.
In the wake of Hurricanes Milton and Helene, homeowners across the United States are facing a worsening insurance crisis.
These two hurricanes are just the latest in a growing list of natural disasters wreaking havoc across the United States. Last year, 28 extreme weather events caused a total of $92.9 billion in damages nationwide.
According to Moody’s RMS, which provides insurance risk management analysis, combined losses from hurricanes Milon and Helene could reach $55 billion.
This high price will have a drastic impact on homeowners. In fact, according to insurance company Insurify, this is already happening: From 2021 to 2023, homeowners saw a 20% increase in home insurance costs, and Insurify expects even further price increases in 2024.
Insurify examined weather conditions, historical premiums, local laws, state building codes and insurer activity to find out which states have the greatest impact on home insurance from natural disasters. As natural disasters increase in severity and property damage, insurers may become insolvent, terminate existing policies, or, in certain states, deny coverage altogether. This leads to less competition in the insurance market and ultimately higher premiums for homeowners.
Climate change is driving these 13 states into an “insurance crisis”
Florida, California and Louisiana have been hit particularly hard by climate disasters in recent years, and as a result several insurers have filed for bankruptcy, canceled policies or left the state, the Insurify report said.
As hurricanes become more severe, neighboring states like Alabama are seeing a sharp increase in insurance prices.
Even so-called “climate pockets” — typically Midwestern states protected from major hurricanes and wildfires — are not safe from a climate or insurance crisis. Thunderstorms, hailstorms, tornadoes and floods cause property damage and drive up insurance costs. In fact, Insurify predicts that the Midwest will see the largest increases in insurance costs as insurance providers scramble to change their pricing strategies.
Fortunately for homeowners in the Northeast, the impact of the storm was not as extreme and home insurance companies remain profitable, reducing the risk of insurance increases. But that doesn’t mean the Northeast is safe from a future insurance crisis — flood risk is increasing, particularly in Vermont, the report says.
Reducing carbon emissions and slowing climate change are critical, but it could take years to see results. For many homeowners, more extreme weather conditions and, as a result, more expensive home insurance items are an imminent and unavoidable reality.
“Even with mitigation efforts, American homeowners — particularly in states teetering on the brink of an insurance crisis — must expect that weather-related losses will drive up premiums and drive insurers out of high-risk areas in the near future,” the report said.
Below are the 13 states experiencing climate-related insurance crises and the projected increase in home insurance rates in 2024, according to Insurify.