Frequent weather catastrophes, induced in part by climate change, are bearing down on homeowners and would-be buyers.

Some home insurers have opted to stop writing new business in heavily impacted states like Florida — currently under threat from Hurricane Idalia — and California, or in other pockets of the country. In other cases, insurers are raising prices, or reducing coverage, and there’s likely to be a continued ripple effect across the country, as weather events tied to climate change proliferate, insurers tighten the reins on risk and reinsurance becomes harder to come by, according to industry experts.

Global insured losses from natural disasters topped $130 billion last year, according to Aon. That was driven by the second-costliest event on the books — Hurricane Ian — which caused catastrophic storm surges and damaging winds and flooding in Florida and Cuba, accounting for roughly $50 billion to $55 billion of the global insured loss, according to Aon.

“Consumers everywhere are going to be faced with tougher choices with respect to limits that are available, the coverages they can purchase and deductibles,” said John Dickson, president and chief executive at Aon Edge, which offers private flood insurance and other insurance products.

Here’s how consumers can navigate the home insurance market amid increasing climate-driven weather risks:

The home insurance market disruption is going to get worse

Things are likely to get worse for homeowners and would-be buyers. Between wildfires, thunderstorms, tornados, hail, floods and other natural disasters, “insurers are having to rethink their risk concentration in any one of those areas,” said David A. Sampson, president and chief executive of the American Property Casualty Insurance Association.

Insurance companies have regulated pricing in most states — they can’t just charge consumers whatever they want, said George Hosfield, senior director and general manager of home insurance solutions at LexisNexis Risk Solutions. But they can decide to pull out of a market if the economics no longer work, a tactic some insurers have exercised.

State Farm, for example, said in May it would stop accepting new home insurance applications in California. Allstate announced a similar move in November of last year. In June, Farmers Insurance became the latest insurer to pull out of Florida, a market that’s been roiled with turmoil for many years.

Policyholders should expect to pay more

The average cost of homeowners insurance nationwide is $2,777 a year, with rates varying by state, according to Insurance.com, a consumer comparison service. Oklahoma is the most expensive state for home insurance at an average cost of $5,317 a year. Contrast that with Hawaii, the least expensive, which has rates averaging $582 a year, according to Insurance.com, though it just suffered a devastating wildfire estimated by Moody’s to cost the state between $4 billion and $6 billion in economic losses.

Meanwhile, costs continue to tick up. From May 2021 to May 2022, 90% of homeowners saw their quoted annual premium increase compared to the previous year, according to Policygenius. The average increase was $134, Policygenius data show.

“In some cases, homeowners won’t be able to get coverage, or they will have to pay more, or they will have less reliable coverage,” said Rich Sorkin, chief executive of Jupiter Intelligence, a climate risk analytics company.

Already, some homeowners are choosing to roll the dice on ownership without insurance rather than pay increasing premiums.

Beyond California and Florida, states where consumers could see the most weather-related impact on coverage options or pricing include Arkansas, Louisiana, Nebraska, Iowa, Kansas, Oklahoma, Illinois, Kentucky and Tennessee, said Stephen Bennett, chief climate officer at The Demex Group, which provides climate risk management solutions. 

Comparison shopping among insurers will become more important

As things continue to unfold, consumers may still have hundreds of choices, and it’s advisable to shop around at least once a year. AM Best ratings can help consumers compare important factors like an insurer’s financial strength and its long-term and short-term credit, Sorkin said. 

Online-only insurance companies may offer more affordable options, but consumers need to run the same analysis they would for traditional carriers. This includes comparing premiums, financial resiliency, how quickly claims are paid and what kind of documentation is needed, Bennett said.

Taking proactive weather-proofing measures can save on costs

Consumers may be able to obtain lower rates — and improve their property’s resiliency — by making certain weather-proofing upgrades, or using building materials known for their hardiness. Stronger windows, hurricane straps, landscaping fixes and fire-resistant vegetation are among the improvements that may result in lower premiums.

Dickson cites the example of a home in Mexico Beach, Fla., that escaped the wrath of Hurricane Michael due to the resilient materials used in its construction. “The time to be thinking about your preparation and your readiness is not when the storm is raging. It’s when the sun is shining,” Dickson said.

For some homeowners, moving may be the best decision

Moving to another location — in-state or a different area of the country entirely — could be a good option for some consumers, especially since some companies continue to allow remote work post-pandemic. “I think people will think about those things, especially in an era where moving locations is easier,” Bennett said.

Hosfield shared the cautionary tale of a co-worker who moved from Georgia to Florida and was quoted $6,000 to $7,000 for an annual home insurance policy — about 10 times her Georgia bill. She ultimately settled in at about $3,500, still a larger-than-expected chunk of change. It was also a time-consuming process that involved switching carriers and out-of-pocket retrofitting costs.

Before buying, consumers need to ask: “What’s the long-term impact on my home and its value by buying a home in an area with significant climate risk?” Hosfield said.

Consumers can use a free tool called Risk Factor, created by the nonprofit First Street Foundation, to more easily understand their local environmental risks. They can enter their zip code and the tool highlights local risks related to flooding, fire, heat and wind.

Long-term regulatory policy changes will be needed

A June Treasury report called on states to study and address the risks of climate change. Some states, such as New York, Connecticut, California and Vermont, are further along in these efforts.

“Unfortunately for homeowners there’s no quick fix other than protecting their properties or moving,” Sorkin said. 

They can, however, urge regulators and policymakers to help fix a broken system. “Some of this is going to have to be addressed on a community-wide scale,” Sampson said.

Correction: Allstate announced it had stopped accepting new home insurance applications in California in November 2022. An earlier version of this article misstated the timing of this change.