These states are at risk of significant increases in homeowners' insurance premiums if the 2024 hurricane season is active.

In an era of changing climate conditions, the state of homeowners insurance in various regions of the U.S. is becoming a cause for concern. The National Oceanic and Atmospheric Administration (NOAA) recently announced that the 2024 hurricane season could be particularly active. If this prediction comes true, homeowners in several states, including some areas of the Mid-Atlantic coast, the Gulf Coast, and even New York, are likely to face multiple disasters and a sharp increase in home insurance premiums. The publication Benzinga analyzed the states most vulnerable to hurricanes.

According to the latest forecasts from NOAA, between 8 and 13 major hurricanes are expected, of which about half (from four to seven) will be category 3 hurricanes or higher. NOAA classifies hurricanes of this category and above (on a five-point scale) as"significant" hurricanesA study conducted by Insurify predicts that 5-8 hurricanes making landfall in the U.S. could cause significant damage to the insurance market in the following states:

• New York
• Virginia
• North Carolina
• South Carolina
• Georgia
• Florida
• Alabama
• Mississippi
• Louisiana

Many states are at risk of hurricanes throughout the year, especially Florida and other Gulf Coast states. Residents of these regions have long faced this threat, but the new state of the housing and insurance market has become a significant issue for locals. The first factor is the ongoing increase in the frequency and intensity of modern hurricanes, which can cause immense damage even without making direct landfall in major urban areas.

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Moreover, the rapid rise in real estate prices has created a situation where even "light" hits from category 3 hurricanes, which essentially bypass major cities, can cause billions of dollars in damage. This is especially relevant for Florida and the Mid-Atlantic region, where the increased risk is reflected in insurance premiums. A study by Insurify indicates that the average homeowners insurance premium in coastal states and the Mid-Atlantic is$2,994that on26%more than the national average in$2,377This is a significant increase; however, state-by-state analysis shows even more alarming figures. The average contribution in Florida reaches a record high of$11,000, while in Louisiana it is almost$6,400per year.

Insurify's research predicts that Florida may face an increase in 2024.7%that will lead to an increase in the average contribution to$11,759It's almost$1,000The monthly mortgage and tax obligations are influencing the housing market in Florida, which is already showing signs of strain. The insurance issue in this state is so pronounced that Citizens Insurance, the state insurer, has become the largest insurance company for housing in Florida.

A rise in rates is forecasted for Louisiana up to$7,800per year, and in Mississippi, insurance premiums may increase by$4,312to$4,482Although the average insurance premium in coastal states is26%exceeds the national average, many residents of these regions are already paying amounts that are two or even three times higher than this value.

It may seem strange to see New York on this list, as it is located far to the north of the Mid-Atlantic coast and the Gulf Coast. However, ocean warming allows hurricanes to maintain their strength much further north than in the past. A hurricane hitting Long Island is not unusual; the total value of real estate in this area can reach trillions of dollars. The financial district and valuable real estate in Brooklyn and Queens could also be at risk if a hurricane strikes New York. Moreover, hurricanes that hit the Mid-Atlantic states still have enough wind strength and rainfall to cause hundreds of millions of dollars in damage as they move north and reach New York. Therefore, the likelihood of increased insurance premiums for homeowners in New York is quite high if NOAA's forecasts prove to be accurate.

The problem of rising home insurance costs does not have simple solutions, and it seems that it will not go away. According to a recent article in Fortune magazine, insurance companies have paid out more$100 billionRegarding insurance claims in 2023. It was the most costly year in a decade, and most climatologists suggest that the frequency and intensity of hurricanes will only increase as global warming continues. Home insurance was expected to cover damage from an estimated 8-13 hurricanes impacting states where policies are more easily issued, all in just one year. This is especially true for companies operating in California, where landslides and wildfires pose a similarly high risk. This also explains why many insurers have completely exited the market in California and Florida.

Nevertheless, if such a situation begins to occur nationwide, it will have serious consequences for the real estate market. The average home price in California has just reached the mark of$900,000However, if insurers simply start refusing to insure homes of such value, banks will also stop issuing loans for them. We cannot underestimate this: the problem with insurance premiums could potentially halt construction and the sale of real estate in the long run.