Non-profit organization First Street Foundation revealed in their latest report that over 39 million properties or about 27% of all U.S. real estate are expected to undergo insurance cost hikes and reduced coverage due to severe weather events which will see an impact on affordable homeowners insurance.
Affordable Homeowners Insurance Rising Problem
According to the report, affordable homeowners insurance was seen to be at stake due to weather-related instances. Although the effect of unaffordable home homeowner insurance will be less significant in other regions, the impact it will make on regions prone to wildfires, storms, and floods such as California, Florida, and Louisiana will be substantial.
The report further disclosed that a large portion of properties are at risk of affordable homeowners insurance because of rising insurance rates and non-renewals. This dilemma can be traced back to the escalating risk wildfires caused for nearly 5 million properties directly affecting the western part, wind damage for around 27 million properties in high-risk coastal wind zones, as well as flooding for approximately 15 million properties across the country.
Unaffordable Homeowners Insurance Implications
Higher insurance costs reduced the value of the properties which in turn challenged millions of Americans to avail affordable homeowners insurance especially those who need to pay mortgages and other costs. Moreover, the unprecedented increase in weather-related circumstances has led to billions of dollars of damages impacting affordable homeowners insurance.