These 5 Big Cities Will See Home Insurance Premiums Skyrocket by up to 300% by 2055
From hurricanes to devastating wildfires, climate change is already having a huge effect on the housing market. Beyond devaluing property prices, climate change will make insurance premiums surge by over 300% in some major cities over the next several decades, a new report from First Street, a company that provides climate risk information for real estate, finds.
And it turns out that there’s one part of the U.S. in particular that’ll feel this shift the most strongly: the Sun Belt. According to the report, 40% of the $2.8 trillion budget spent on natural disasters since 1980 have been in the three largest Sun Belt States: Florida, Texas, and California. First Street notes that North Carolina saw the largest increase in premiums from from 2019 to 2024 as a result of the state’s emerging hurricane risk, while Florida, Louisiana, and California currently have the highest insurance premium increases in the United States, and their research finds that those premiums will simply keep skyrocketing.
The report ranked the five largest metro areas that will face the highest insurance premium increases from 2025 to 2055: Miami, Florida (322%), Jacksonville, Florida (226%), Tampa, Florida (213%), New Orleans, Louisiana (196%), and Sacramento, California (137%).
As insurance companies start pricing in climate risk with more expensive premiums, potential homebuyers are also starting to consider how natural disaster-prone areas affect home valuations and the desirability of these communities.
One 2023 Zillow survey found that 80% of potential homebuyers now consider climate change when looking at homes to purchase. As people flee areas prone to natural disasters as well as areas with prohibitively expensive insurance premiums, previously popular real estate markets might see their value go down. The report predicts that 55 million Americans will “voluntarily relocate within the U.S. to areas less vulnerable to climate risks by 2055.”
Those Sun Belt areas could definitely feel those effects in the coming decades. Realtor.com calculated that the recent California wildfires put more than $40 billion of real estate value at risk, while the flooding and damage from Hurricane Helene — which devastated parts of Florida, North Carolina, and Tennessee in 2024 — is estimated to cost between $225 billion to $250 billion.
While grim, these findings don’t necessarily mean you should panic if you are thinking of buying in a natural disaster-prone area — instead, you’ll want to do your research and factor in the costs of insurance premiums into your budget while also checking how likely it is that your home might be impacted by natural disasters.
And, as of this year, Zillow’s new First Street Climate Risk Data feature means that you can calculate a “risk” score from 1 to 10 for any property listing in the United States based on the home’s likelihood of floods, wildfires, wind, heat, and air quality issues. The tool might also suggest additional insurances or other preventative measures you might want to take to protect your home.
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