Climate hazards now threaten $11.2 trillion in U.S. residential property wealth, with nearly one in four homes facing exposure to wind, floods, or wildfires. Yet homeowners are dropping insurance coverage at alarming rates as premiums spike beyond affordability.
The Realtor.com analysis reveals a dangerous gap. Property owners in high-risk zones face mounting insurance costs just as climate events intensify. In response, many are canceling policies or switching to cheaper, skimpier coverage that leaves them dangerously underprotected.
This creates a cascading problem for the housing market. Homebuyers in vulnerable areas struggle to secure mortgages without full coverage. Lenders require insurance as a condition of financing. When insurers pull out of markets or raise rates 40 to 100 percent annually, homeowners face impossible choices: pay crushing premiums, go uninsured, or sell.
States hit hardest include Florida, California, Texas, and the Carolinas. Florida alone has seen three major insurers exit the market since 2021. Standard homeowners policies now cost $2,000 to $4,000 yearly in Miami, compared to $1,200 nationally. In California, wildfire insurance premiums have tripled in some counties.
Renters face different but related pressure. Landlords passing along rising insurance costs through higher rents squeeze tenants, especially in flood zones and coastal areas. Property values in high-risk zones have already begun plateauing or declining as buyers price in future losses and insurance costs.
The $11.2 trillion figure underscores the scale. That represents roughly one quarter of all U.S. residential real estate value. As coverage becomes scarcer and costlier, homeowners in moderate-risk areas face steeper premiums to subsidize high-risk properties. This pools risk unevenly