Seventy percent of Florida homeowners, or the area in which they reside, have been affected by changes in cost or coverage of home insurance in the past year, as reported by Redfin.
Nearly three-quarters (70.3 percent) of homeowners in Florida and 51 percent in California have experienced increased home insurance rates or changes in coverage in the last year. This data is from a recent Redfin report released on Wednesday.
In contrast, 44.6 percent of homeowners nationwide have observed changes to their home insurance in the past year according to the analysis by Redfin.
The data comes from a survey commissioned by Redfin and conducted by Qualtrics in February 2024, sent to 2,995 homeowners and renters across the U.S.
As natural disasters have become more frequent and severe in California and Florida, homeowners have had to grapple with rising premiums or insurers exiting the states. Some major insurers in both states have restricted new homeowners policies due to increased risks.
Due to the escalating insurance costs and natural disasters, some residents in these states are considering moving to areas with less risk. However, despite the challenges, the net migration to flood- or wildfire-prone areas continues to exceed the outflow.
Daryl Fairweather, the Chief Economist at Redfin, emphasized the potential impact on property values for homeowners in areas with soaring premiums. Insurers dropping coverage is a significant concern for many, with a considerable percentage facing the risk of losing coverage.
On a national level, the average annual home insurance rate surged by 19.8 percent between 2021 and 2023, with further increases expected. In Florida, the average annual rate is already notably high.
In light of these challenges, only a third of homeowners are aware of the natural disasters covered by their insurance policies, posing a risk of insufficient coverage.
Additionally, a survey of 500 real estate agents conducted by Redfin found a significant uptick in insurance-related issues during transactions, particularly in Florida and California. Email Lillian Dickerson for more information.
The report issued by Redfin reveals that 70.3 percent of homeowners in Florida and 51 percent of homeowners in California have been impacted by changes in their home insurance rates or coverage in the last year. This data is based on a survey conducted by Qualtrics in February 2024 among 2,995 U.S. homeowners and renters. The increase in natural disasters in both states has led to surging premiums and insurers limiting coverage, with some homeowners facing dropped policies. The average annual U.S. home insurance rate has spiked by 19.8 percent between 2021 and 2023, and is expected to increase by another 6 percent this year. Many homeowners are considering moving due to rising insurance costs and climate risks, but the net inflow to disaster-prone areas continues to be higher than the outflow. Concerns about insurers stopping coverage are prevalent, with only one-third of homeowners knowing which natural disasters are covered under their policy. Real estate agents have also seen an increase in issues related to home insurance during transactions, particularly in Florida and California. Despite challenges, homes with low disaster risk and insurance costs are expected to become more valuable as climate change intensifies.
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