Climate change is no longer just a distant concern, it’s reshaping our everyday lives, especially when it comes to protecting our homes. For homeowners across the country, the climate change impact on insurance is becoming increasingly clear: premiums are rising, coverage is shrinking, and in some places, it’s harder than ever to find a policy at all. At John E. Peakes Insurance Agency, we believe every homeowner deserves to understand how these changes affect their coverage and what steps they can take to stay protected.
Across the United States, homeowners are opening their insurance bills to find higher premiums year after year. The reason? Climate change is driving more frequent and severe weather events—wildfires, hurricanes, floods, and tornadoes, that result in costly property damage and insurance claims.
Between 2021 and 2024, homeowners insurance rates rose by an average of 27% nationwide. In high-risk areas, the increases have been even steeper—sometimes doubling or tripling within just a few years. In California, for example, State Farm recently received approval to raise rates by 17% in response to growing wildfire risks. And it’s not just California: states like Florida, Louisiana, and Texas are also seeing dramatic hikes due to hurricanes and flooding.
According to the U.S. Treasury, average premiums increased 8.7% faster than inflation from 2018 to 2022. In the 20% of ZIP codes with the highest expected annual losses from climate-related perils, homeowners paid $2,321 in premiums on average—82% more than those in the lowest-risk areas. The message is clear—if you live in an area vulnerable to climate-related disasters, you’re likely paying much more for coverage.
It’s not just about higher premiums. The climate change impact on insurance is also making it harder to find coverage at all. Insurers are pulling back from high-risk markets, reducing the types of damage they’ll cover, and sometimes exiting certain states altogether.
In California, some major insurers have stopped offering new homeowners policies due to wildfire risks. In Florida and Louisiana, insurers have become insolvent after major hurricanes, leaving homeowners scrambling for coverage. Even when policies are available, they may come with higher deductibles, stricter limits, or exclusions for certain types of damage, such as wind, fire, or flood.
Standard homeowners insurance typically does not cover flood damage, so properties at risk of flooding need separate flood insurance. However, experts warn that current flood risk assessments may understate the real danger, leaving many homeowners unprotected.
The ripple effects of these changes are significant. Rising insurance costs are putting pressure on household budgets, especially for families already stretched thin. In some areas, high insurance rates and low housing values are making it harder for people to buy or sell homes, further complicating the nation’s affordable housing challenges.
Insured losses from natural disasters in the U.S. now routinely approach $100 billion a year, compared to just $4.6 billion in 2000. With two out of three homes now considered underinsured against climate risks, many homeowners could face financial hardship if disaster strikes.
While the climate change impact on insurance is undeniable, there are steps you can take to protect your home and your finances:
At John E. Peakes Insurance Agency, we understand the challenges homeowners face in today’s changing climate. Our experienced team takes the time to assess your unique needs, shop around for the best rates, and tailor a policy that fits your family and your budget. We’re committed to making insurance easy and hassle-free, so you can focus on what matters most—protecting your home and your loved ones.
Give us a call for a free, no-obligation quote and let us help you navigate the climate change impact on insurance.
Don’t let the climate change impact on insurance catch you off guard. Contact us today, or call us directly at 1-800-800-5199 to ensure your home is protected, no matter what the future holds.
