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Nearly three-quarters (70.3 percent) of homeowners in Florida and 51 percent of homeowners in California said they — or the area in which they live — has been impacted by increased home insurance rates or changes in coverage in the last year, according to a new report released Wednesday from Redfin.
By contrast, 44.6 percent of homeowners nationwide have seen changes to their home insurance in the last year, the Redfin analysis shows.
The data comes from a Redfin-commissioned survey conducted by Qualtrics in February 2024 that was sent out to 2,995 U.S. homeowners and renters across the country.
As natural disasters have increased in frequency and intensity in California and Florida in recent years, homeowners have had to deal with surging premiums or their insurers bowing out of the states altogether. Seven of California’s largest property insurers have started limiting new homeowners policies in the state as wildfires increase in the area, while 11 insurers in Florida have liquidated since 2017 as flood and storm risks increase. Those numbers can be particularly alarming as natural disasters continue to grow — the upcoming Atlantic hurricane season, which officially begins in June, is expected to be unusually active this year, with a potential for 11 hurricanes, according to Colorado State University.
Growing insurance costs and natural disasters have led some of these states’ residents to move, including 11.9 percent of Floridian survey respondents who said they plan to move in the next year because of rising insurance costs and 13.1 percent of Californian survey respondents who plan to move in the next year because of climate risks or natural disasters. Even with these challenges, the net inflow to areas that are flood- or wildfire-prone continues to be greater than the net outflow, according to a Redfin analysis from July 2023.
Daryl Fairweather
“Homeowners living in areas where insurance premiums are surging are at risk of seeing their properties gain less value than homeowners in areas with stable premiums — and in some cases, they may even lose money,” Redfin Chief Economist Daryl Fairweather said in a statement. “Homes with low disaster risk and low insurance costs will likely become increasingly popular, and thus more valuable, as the dangers of climate change intensify.”
Dropped insurance coverage is a real concern for Floridians and Californians. Twelve percent of Florida homeowners who experienced changes to their policy in the last year had their coverage completely dropped by their carrier. Nearly 11 percent of California homeowners experienced the same, compared to only 8.3 percent of respondents overall.
Meanwhile, 27.7 percent of survey respondents in Florida said they are concerned their insurer might stop coverage, while 13.5 percent of respondents in California and 8.9 percent of overall respondents share the same fear.
The average annual U.S. home insurance rate spiked 19.8 percent between 2021 and 2023 and is expected to increase another 6 percent this year to $2,522, according to Insurify. In Florida, the average annual rate is already sky-high at $10,996.
Out of those homeowners who responded to Redfin’s survey that they lost coverage, one in three have already moved or plan to move to a new area where insurance coverage is available. Still, about the same percentage of homeowners — 30 percent — plan to stay in their home with very limited or no coverage.
Unfortunately, only one-third of homeowners in the U.S. know which natural disasters are covered under their insurance policy. Just 27.2 percent know which natural disasters are covered and how much damage is covered under their policy.
In a separate survey of 500 real estate agents across the U.S., Redfin found that 34.4 percent of agents saw an increase in issues related to home insurance during transactions in the last year, including clients having trouble obtaining affordable home insurance or canceling a transaction altogether due to home insurance.
Issues with insurance seemed to be a much wider issue in Florida and California, where 73 percent of agents and 64 percent of agents, respectively, saw an increase in problems with insurance during transactions in the last year.
