{"id":159342,"date":"2023-09-30T15:47:00","date_gmt":"2023-09-30T21:47:00","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=159342"},"modified":"2024-02-29T17:52:42","modified_gmt":"2024-03-01T00:52:42","slug":"cities-in-these-areas-are-facing-higher-insurance-costs","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/cities-in-these-areas-are-facing-higher-insurance-costs","title":{"rendered":"Insurance Premiums are at Huge Risk in These Counties\u2014Here’s What That Means to Investors"},"content":{"rendered":"\n

Natural disasters are becoming more and more costly, especially for homeowners. With risk from extreme weather events, such as flooding and wildfires, insurance companies are pulling out of or even <\/span>stopping coverage<\/span><\/a> in areas that they say have increased risk.<\/span><\/p>\n\n\n\n

Insurance companies also report that they are struggling to cover the cost of rebuilding after disasters. In 2022 alone, global insured losses from natural disasters exceeded <\/span>$130 billion.<\/span><\/a><\/p>\n\n\n\n

Insurance rates could surge for millions of homes across the U.S. due to increased natural disaster risk, according to a recent <\/span>study from First Street Foundation<\/span><\/a>. While insurance prices have increased in areas already prone to extreme weather, such as California, Florida, and Louisiana, it\u2019s growing in other areas of the U.S. as well.<\/span><\/p>\n\n\n\n

In total, about 40 million homes and commercial properties are at risk of a spike in insurance premiums due to the increased costs of climate change. This <\/span>climate bubble<\/span><\/a> is only just starting to be understood, including its potential long-term effect on the housing market.<\/span><\/p>\n\n\n\n

Where are Insurance Premiums at Risk?<\/span><\/h2>\n\n\n\n

Wildfires have become longer<\/span><\/a> and more intense than they were 20 years ago, burning more tree coverage. <\/span>Coastal flooding<\/span><\/a> has become more frequent, especially along the Gulf Coast and East Coast. The U.S. is quickly leading the world in <\/span>extreme weather events<\/span><\/a>, with more tornados, hurricanes, droughts, heat waves, severe thunderstorms, and even the dreaded polar vortex.<\/span><\/p>\n\n\n\n

Almost 7 million properties have already had an increase in insurance prices or been completely dropped by insurers, First Street found. And while most of this is in areas already prone to wildfires and floods, there are other areas where flooding and wildfires are increasing. <\/span><\/p>\n\n\n\n

For example, Vermont witnessed unusual <\/span>catastrophic flooding<\/span><\/a> in July, while <\/span>Kentucky<\/span><\/a> and <\/span>West Virginia<\/span><\/a> were also hit with costly and deadly flooding from rainstorms. And then there\u2019s the tragic wildfires that occurred in early August in <\/span>Hawaii<\/span><\/a>.<\/span><\/p>\n\n\n\n

Properties in more than 1 in 10 American cities are at risk of increased premiums, First Street data shows. This includes areas like California, Florida, and Louisiana, but also areas on the East Coast and along the Gulf Coast where properties are more vulnerable to hurricanes and rising sea level risk, such as Virginia, New York, North Carolina, South Carolina, Texas, and Alabama.<\/span><\/p>\n\n\n\n

Some of the counties and cities where at least 80% of the properties are at risk include: <\/span><\/p>\n\n\n\n

New York<\/span><\/h3>\n\n\n\n