A Redfin survey has found that nearly three-quarters (70.3%) of Florida homeowners and over half (51%) of California homeowners have seen a rise in insurance costs or change in coverage in the past year.
The survey was fielded to 2,995 homeowners and renters in the United States.
According to Redfin’s survey, insurance is top of mind for homeowners in Florida and California, this is mainly due to the fact that those states are the epicentres of the insurance housing crisis.
Many homeowners have seen their premiums skyrocket (71.7%), and some have lost coverage altogether because their insurer has dropped them.
Roughly one in eight Florida respondents (12%) and one in nine California respondents (10.7%) said their insurance company stopped offering coverage for their home, compared with 8.3% of respondents overall.
Intensifying natural disaster risk is the main reason why a number of insurers have been prompted to stop doing business in Florida and California.
So far, seven of California’s biggest property insurers have opted to limit new policies in the state amid increasing wildfire risk. And in Florida, eleven insurers have liquidated amid growing flood and storm risk.
Other homeowners are worried they will be dropped by their insurer in the future: Over one-quarter (27.7%) of respondents in Florida said they are or have been concerned their insurer may stop offering coverage for their home, compared with 13.5% of respondents in California and 8.9% of respondents as a whole.
The average annual US home insurance rate is expected to rise 6% this year to $2,522 after surging 19.8% between 2021 and 2023, according to Insurify.
In Florida, the average annual rate is $10,996 – higher than any other state.
The survey also found that mounting insurance costs and natural disasters are prompting some people to relocate.
In Florida, 11.9% of respondents who plan to move in the next year said that rising insurance costs as a reason for this – roughly twice the national share of 6.2%.
In California, 13.1% of people who intend to relocate in the coming year cited concern for natural disasters or climate risks as a reason, compared with 8.8% of respondents nationwide.
Nearly 30% are staying in their home with little or no coverage. Almost half (46%) of respondents who lost insurance coverage said they’ve found a new insurer to cover their home. A similar share (44.5%) said they pay a significantly higher premium for coverage than before.
While some people are leaving disaster-prone areas, there are still more people moving in than out, a separate Redfin analysis found.
Daryl Fairweathe, Redfin Chief Economist said: “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.
“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.”
Additionally, the survey found that only one-third (34%) of homeowners know which natural disasters their insurance covers.
With climate disasters on the rise, homeowners should revisit their existing insurance policies so they know exactly what and how much is covered, Fairweather said. In some cases, they may want to purchase an additional policy covering a specific disaster, like fire or flood.