Home insurance premiums are expected to see significant increases across various regions of the United States over the next three decades, with some areas facing staggering growth rates. A new analysis from First Street highlights counties where homeowners may experience the most dramatic changes, largely due to climate-related risks.
Projected Home Insurance Increases by 2055
According to First Street’s proprietary analysis, which considers property-specific and climate-related risks, home insurance premiums are projected to rise substantially between 2025 and 2055. Some of the most affected counties include:
- Orleans Parish, Louisiana: +634%
- Miami-Dade County, Florida: +590%
- Pinellas County, Florida: +451%
- St. Tammany Parish, Louisiana: +351%
- Duval County, Florida: +333%
Twelve of the top 20 counties expected to see the highest premium increases are located in Florida, a state already grappling with rising insurance costs. The study attributes these increases to heightened exposure to hurricanes, flooding, and other climate-related threats.
Potential Challenges for Homeowners and Mortgage Lending
During a recent Senate hearing, Federal Reserve Chair Jerome Powell underscored the potential long-term implications of these rising costs. He noted that in the coming decades, some homeowners may struggle to find home insurance, particularly in coastal regions and areas prone to wildfires. This shift could also impact mortgage lending, as banks and insurers may withdraw from high-risk markets.
“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” Powell stated. “There won’t be banks [lending mortgages], so it’ll fall on homeowners and residents. But it’ll also fall on state and local governments.”
Some states have already begun stepping in to provide alternatives where private insurers have exited the market. However, the sustainability of such interventions remains a key question as risk exposure continues to grow.
Considerations for Homeowners and Investors
As insurance costs rise, homeowners and investors in high-risk areas may need to reassess their financial planning strategies. Factors to consider include:
- Long-term affordability: Higher insurance premiums could impact overall homeownership costs.
- Property value implications: Increased expenses may affect real estate demand in certain markets.
- State intervention: The role of government-backed insurance programs may expand in response to market shifts.
While these projections provide insight into potential future trends, they are based on current risk models and do not account for inflation or broader economic factors. As climate patterns evolve and mitigation efforts develop, the landscape of home insurance could continue to shift in unexpected ways.
For homeowners in at-risk areas, staying informed and exploring risk mitigation strategies will be key to navigating these anticipated changes.