Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Home insurance premiums are set to dramatically increase over the next few decades, particularly in cities more likely to suffer natural disasters.
Why It Matters
In 2024, there were 27 individual weather and climate disasters inflicting at least $1 billion in damages, according to The National Oceanic and Atmospheric Administration’s (NOAA) National Centers for Environmental Information (NCEI).
This only trailed 2023’s record-setting number of events by one, and the disasters in 2024 caused at least 568 direct or indirect fatalities, and cost a total of approximately $182.7 billion, per the site.
As climate disasters have been on the increase in recent years, home insurance companies have had to up premiums. A study by the National Bureau of Economic Research found that average premiums had increased by 33 percent between 2020 and 2023, and they are only going to continue rising, ramping up costs for homeowners.
The gated community of Encore Resort at Reunion on January 10, 2023 in Kissimmee, Florida. The gated community of Encore Resort at Reunion on January 10, 2023 in Kissimmee, Florida. Joe Raedle/Getty Images
What To Know
According to a study by First Street, a company that conducts climate risk financial modeling, climate-driven weather phenomena are expected to increase homeowners’ risk-based insurance premiums nationwide by an average of 29.4 percent by 2055.
Texas, California, and Florida are expected to be the hardest hit by the increases, says the site.
According to a report by the real estate listings website realtor.com, which cited First Street data, insurance premiums are projected to rise by 322 percent in Miami by 2055.
Jacksonville, Florida, is predicted to experience the second highest increase, of 226 percent, followed by Tampa, where premiums are expected to rise by 213 percent.
A 196 percent increase in premiums is forecast for New Orleans, while Sacramento, California, may be charged an extra 137 percent.
It is also expected that flood insurance premiums will increase dramatically in the coming years, realtor.com reported, citing First Street’s model which estimates that flood damages will increase by an average of 28 percent by 2055. An at-risk city like New Orleans could suffer a flood damage cost rise of as much as 533 percent.
Atlantic City, in New Jersey, could be hit by a flood damage rise of 296 percent. In Fort Lauderdale, Florida, it could be 122 percent, according to realtor.com.
First Street also forecasts climate disasters will result in 55 million Americans having to relocate in the next few decades, which could boost the populations of states such as North Dakota and Montana, due to their climate resilience.
What People Are Saying
Dr. Jeremy Porter, Head of Climate Implications Research at First Street, said in the company’s press release:
Where Insurance Premiums Are Rising Across US
