{"id":187872,"date":"2026-05-13T11:18:12","date_gmt":"2026-05-13T17:18:12","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=187872"},"modified":"2026-05-13T11:18:14","modified_gmt":"2026-05-13T17:18:14","slug":"extreme-weather-this-summer-could-make-these-8-states-uninvestable","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/extreme-weather-this-summer-could-make-these-8-states-uninvestable","title":{"rendered":"Extreme Weather This Summer Could Make These 8 States &#8220;Uninvestable&#8221;"},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">If you thought El Ni\u00f1o was bad, it just got supersized, and the resulting extreme weather patterns could wreak havoc for investors who own or plan to own property in the eight states in its path.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Super El Ni\u00f1o Blasts Into an Insurance Market Already Under Strain<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">According to meteorologists, <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.usgs.gov\/faqs\/what-el-nino-and-what-are-its-effects#:~:text=The%20term%20El%20Ni%C3%B1o%20(Spanish,and%20eastern%20tropical%20Pacific%20Ocean.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">El Ni\u00f1o<\/span><\/a><span data-preserver-spaces=\"true\">\u2014the complex weather pattern stemming from warming waters in the Pacific Ocean\u2014could redouble in force this year, increasing the odds of extreme weather such as storms, flooding, and hurricanes across the Sunbelt in some of the most coveted new developments and investment property locations in the U.S.<\/span><\/p>\n<p><em><a class=\"editor-rtfLink\" href=\"https:\/\/www.newsweek.com\/super-el-nino-home-insurance-costs-floods-premiums-11919363\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Newsweek<\/span><\/a> <\/em><span data-preserver-spaces=\"true\">reports that insurance costs could increase dramatically in anticipation of the arrival of Super El Ni\u00f1o, decimating <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rental-property-cash-flow-analysis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cash flow<\/span><\/a><span data-preserver-spaces=\"true\"> in states including:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Alabama<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Arizona<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Southern California<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Florida<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Louisiana<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Mississippi<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">New Mexico<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Texas<\/span><\/li>\n<\/ul>\n<h2><span data-preserver-spaces=\"true\">Insurance Rates Have Increased 46% in Five Years<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Super El Ni\u00f1o couldn\u2019t come at a worse time for homeowners and investors, who have seen <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-243\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">insurance costs escalate precipitously<\/span><\/a><span data-preserver-spaces=\"true\"> in recent years.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The <\/span><em><a class=\"editor-rtfLink\" href=\"https:\/\/www.latimes.com\/business\/story\/2026-03-18\/home-insurance-premiums-set-to-rise-again-as-extreme-weather-drives-costs-up\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Los Angeles Times<\/span><\/a><\/em><span data-preserver-spaces=\"true\">, using data from Insurify, an online insurance comparison site, reports that average U.S. homeowner\u2019s insurance premiums <\/span><span data-preserver-spaces=\"true\">are projected<\/span><span data-preserver-spaces=\"true\"> to rise another 4% in 2026 to about $3,057 after increasing 12% in 2025 and a massive 46% since 2021, with extreme weather and rebuilding costs cited as key drivers.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Home insurance prices, the <\/span><em><span data-preserver-spaces=\"true\">Times <\/span><\/em><span data-preserver-spaces=\"true\">reported, were outpacing both inflation and income growth. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> means for investors, <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/cap-rate-real-estate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cap rates<\/span><\/a><span data-preserver-spaces=\"true\"> and cash flow have <\/span><span data-preserver-spaces=\"true\">been wrecked<\/span><span data-preserver-spaces=\"true\">.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Flood insurance, which averages around $1,100 nationwide through the federally backed National Flood Insurance Program (NFIP) administered by FEMA, rising to over $2,000 in high-risk areas, is usually purchased separately. However, it is <\/span><span data-preserver-spaces=\"true\">hit or miss<\/span><span data-preserver-spaces=\"true\"> because weather patterns remain unpredictable.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Natalie Lord, a principal climate scientist for global flood risk intelligence provider Fathom, told <\/span><em><span data-preserver-spaces=\"true\">Newsweek<\/span><\/em><span data-preserver-spaces=\"true\">:<\/span><\/p>\n<p><em><span data-preserver-spaces=\"true\">\u201cIt&#8217;s hard to tell exactly where the highest risk is going to be until it actually happens. <\/span><span data-preserver-spaces=\"true\">But <\/span><span data-preserver-spaces=\"true\">I think<\/span><span data-preserver-spaces=\"true\"> that <\/span><span data-preserver-spaces=\"true\">probably does mean whilst<\/span><span data-preserver-spaces=\"true\"> insurance premiums in general have been increasing, the markets in those states are likely to see <\/span><span data-preserver-spaces=\"true\">greater than the country average<\/span><span data-preserver-spaces=\"true\"> increases in premiums to try to counteract some of those losses [from El Ni\u00f1o].<\/span><span data-preserver-spaces=\"true\"> The issue <\/span><span data-preserver-spaces=\"true\">will be<\/span><span data-preserver-spaces=\"true\"> not all of those states are likely to see extreme losses.\u201d<\/span><\/em><\/p>\n<h2><span data-preserver-spaces=\"true\">The Cost to Investors in High-Risk Areas<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The impact is clearly visible in recent data. <\/span><em><a class=\"editor-rtfLink\" href=\"https:\/\/www.newsweek.com\/map-shows-where-americas-home-insurance-crisis-is-hitting-hardest-11927472\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Newsweek <\/span><\/a><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.newsweek.com\/map-shows-where-americas-home-insurance-crisis-is-hitting-hardest-11927472\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">reports<\/span><\/a><span data-preserver-spaces=\"true\"> that Arizona saw the steepest <\/span><span data-preserver-spaces=\"true\">homeowner\u2019s insurance cost increase<\/span><span data-preserver-spaces=\"true\"> in the country, with average premiums up 94% between 2021 and 2025, while Florida, Texas, and Louisiana also saw steep increases due to severe weather losses and reconstruction costs.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">For homeowners looking to trade the icy North for the balmy Sunbelt and lower their cost of living,<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.fidelity.com\/learning-center\/personal-finance\/cost-of-living-sun-belt\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> Fidelity Investments<\/span><\/a><span data-preserver-spaces=\"true\"> calculated that the sunnier outlook doesn\u2019t extend to the overall cost of living, which is evened out for property owners by insurance costs.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Citing Bankrate data, Florida was the worst of all Sunbelt states, with a combined annual outlay for homeowners (based on a $300,000 home) and car insurance totaling a hefty $9,550.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">For investors looking to <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/tips-for-flipping-houses\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">flip homes<\/span><\/a><span data-preserver-spaces=\"true\">, the Rust Belt eclipses the Sunbelt, which has been hit hard by the \u201caffordability economy,\u201d with insurance costs no doubt playing their part. According to<\/span> <em><a class=\"editor-rtfLink\" href=\"https:\/\/fortune.com\/2026\/04\/11\/housing-prices-by-city-2026\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Fortune<\/span><\/a><\/em><span data-preserver-spaces=\"true\">, U.S. housing is experiencing a historic \u201creversion to the mean.\u201d Or to put it more plainly: &#8220;The formerly sizzling metros have gone cold, and the unsexy plodders are back in vogue.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to a report from<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/firststreet.org\/research-library\/property-prices-in-peril\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> First Street,<\/span><\/a><span data-preserver-spaces=\"true\"> a climate-risk research firm, rising premiums, insurance deserts, and buyers skirting high-risk areas will drive a $1.47 trillion decline in home values by 2055.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Picking Investments With Insurance in Mind Is an Increasingly Nuanced Process<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Picking areas to invest in while accounting for insurance costs is increasingly difficult, as wild weather patterns upend the underwriting business. The<\/span> <em><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2025\/11\/20\/climate\/home-prices-climate-change-insurance.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">New York Times<\/span><\/a><\/em><span data-preserver-spaces=\"true\"> reported last year that insurance now accounts for more than 20% of home insurance premium increases since 2017.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">A Basic Cash Flow Calculation With Today\u2019s Insurance Rates<\/span><\/h2>\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/finance.yahoo.com\/economy\/policy\/articles\/true-cost-home-insurance-2025-080000083.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Bankrate<\/span><\/a><span data-preserver-spaces=\"true\">\u2019s 2026 ranking finds that Louisiana homeowners pay an average of $6,274 per year. That amounts to $523 a month, the highest state average in the country.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">For a simple back-of-the-envelope cash flow calculation on a $300,000 property, this equates to:<\/span><\/p>\n<ul>\n<li><strong><span data-preserver-spaces=\"true\">Monthly rent:<\/span> <\/strong><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/la\/rent-houses\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$2,200<\/span><\/a><span data-preserver-spaces=\"true\"> (from tenant)<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Other operating expenses (repairs, management, etc.): <\/span><\/strong><span data-preserver-spaces=\"true\">$400<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Mortgage payment (principal and interest):<\/span><\/strong><span data-preserver-spaces=\"true\"> $1,000<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Property taxes: <\/span><\/strong><span data-preserver-spaces=\"true\">$400<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Homeowner\u2019s insurance:<\/span><\/strong><span data-preserver-spaces=\"true\"> $600 (about $7,200 per year, slightly above the $6,274 statewide average but well within the range for Orleans Parish)<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Total housing cost (mortgage, taxes, insurance):<\/span><\/strong><span data-preserver-spaces=\"true\"> $2,000<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">The insurance share of the housing cost: <\/span><\/strong><span data-preserver-spaces=\"true\">$600 \u00f7 $2,000 = 30%<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">So, in simple cash flow terms:<\/span><\/p>\n<ul>\n<li><strong><span data-preserver-spaces=\"true\">Gross rent:<\/span><\/strong><span data-preserver-spaces=\"true\"> $2,200<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Operating expenses (not counting mortgage, tax, and insurance):<\/span><\/strong><span data-preserver-spaces=\"true\"> $400<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Net before mortgage, tax, and insurance:<\/span><\/strong><span data-preserver-spaces=\"true\"> $1,800<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Subtract mortgage ($1,000), tax ($400), and insurance ($600): <\/span><\/strong><span data-preserver-spaces=\"true\">$2,000<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Cash flow after all housing costs:<\/span><\/strong><span data-preserver-spaces=\"true\"> $2,200 &#8211; $400 &#8211; $1,000 &#8211; $400 &#8211; $600 = $200<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">In any other market, a mortgage payment of $1,000 and incoming rent of $2,200 would scream \u201cdeal!\u201d\u2014assuming the neighborhood was halfway decent. <\/span><span data-preserver-spaces=\"true\">However, <\/span><span data-preserver-spaces=\"true\">to make<\/span><span data-preserver-spaces=\"true\"> only $200 in monthly cash flow, which could easily be wiped out by an unexpected repair not factored into <\/span><span data-preserver-spaces=\"true\">the<\/span><span data-preserver-spaces=\"true\"> monthly expenses, is a marginal deal at best.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Should insurance climb above $600\/month, which <\/span><span data-preserver-spaces=\"true\">is highly likely given<\/span><span data-preserver-spaces=\"true\"> anticipated cost increases, it will further erode the economics of ownership and investment.<\/span><\/p>\n<p><em><span data-preserver-spaces=\"true\">If you want to calculate these numbers for a deal you\u2019re working on or for one of your own properties, check out <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/investment-calculators\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BiggerPockets\u2019 Investment Calculators<\/span><\/a><span data-preserver-spaces=\"true\"> and get an accurate report in minutes.<\/span><\/em><\/p>\n<h2><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The usual cash flow metrics these days are being upended by rising costs across the board\u2014including purchase prices, interest rates, and, notably, insurance. What\u2019s often not factored into these cash flow equations is the financial stress tenants face amid the affordability crisis.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">With deals increasingly hanging by a thread, a missed rental payment or two is increasingly likely and could tip a deal into negative cash flow in a heartbeat.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">For investors, earning the most money from the fewest doors <\/span><span data-preserver-spaces=\"true\">has to be<\/span><span data-preserver-spaces=\"true\"> the safest path, simply because it mitigates risk. Yes, <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-appreciation-in-real-estate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">appreciation<\/span><\/a><span data-preserver-spaces=\"true\"> and leverage are great concepts in theory, but not in today\u2019s market unless you have a lot of cash to absorb potential losses.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you thought El Ni\u00f1o was bad, it just got supersized, and the resulting extreme weather patterns could wreak havoc for investors who own or plan to own property in [&hellip;]<\/p>\n","protected":false},"author":613725,"featured_media":178582,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7401],"tags":[],"class_list":["post-187872","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insurance"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/187872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=187872"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/187872\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/178582"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=187872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=187872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=187872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}