From Fortune:

The president of CoreLogic’s global insurance solutions business, Garrett Gray, discusses the difficulty in obtaining homeowners’ insurance in climate risk-prone states like California and Florida. The changing insurance scene is due to extreme weather events costing the country $23 billion a year. Property insurers are capping policies, refusing new applications, and raising rates due to increased costs and risk. United Policyholders co-founder Amy Bach calls this insurance crisis acute in both wildfire-prone California and hurricane-prone Florida. Insurers are struggling with more claims from policyholders and more extreme weather events, which makes it harder for the residential property insurance business to be profitable. California’s FAIR Plan offers insurance for residents that can’t obtain it through a regular company, but it’s bare-bones and costly. Severe weather events are causing more losses for insurers and more people displaced from their homes. The housing market is starting to recover from the pandemic housing boom, but the insurance crisis in some states could affect Americans’ ability to buy homes. Prop 103 in California limits the use of climate models to predict risk and may be revisited, while regulatory changes in Florida are on the way. One legislation supported by Bach’s nonprofit says that if a homeowner has mitigated their risk by meeting “safer from wildfires” standards, then an insurer must offer them a policy. Florida is updating building codes to address the increasing frequency and severity of weather events, but the effect will take time. Gray points out that areas not previously perceived as risky are now facing frequent and intense weather-related catastrophes, which is forcing insurers to adjust their risk models. Real estate deals are falling through because of the lack of insurability of the property, and homeowners are struggling to insure their biggest asset, causing emotional distress.



Read more: Sky-high home prices, elevated mortgage rates, and now, insurance woes