Why Some Properties are Getting Too Expensive to Insure
Many Americans are facing rising insurance premiums—and in some high-risk regions, properties are becoming nearly impossible to insure at all. Why? Properties located in disaster-prone areas have seen significant premium spikes, driven by increasingly frequent and severe natural disasters, surging reconstruction costs, and market exits by major insurers.
Why Are Insurance Premiums Rising in Disaster-Prone Areas?
Insurance premiums have long been higher in regions susceptible to natural catastrophes such as hurricanes, wildfires, floods, and tornadoes. But recent years have accelerated that trend.
According to the National Oceanic and Atmospheric Administration (NOAA), in 2024, the U.S. experienced 27 weather/climate disaster events with losses exceeding $1 billion each. Meanwhile, insurers faced the third-costliest year on record for natural catastrophe losses, totaling $140 billion, as the impact of climate change continues to drive more frequent and severe weather events.
Climate change continues to fuel the frequency and intensity of these events. Rising sea levels, hotter temperatures, and prolonged droughts increase exposure to floods, wildfires, and storm surge—all of which insurers must price into their models.
Coastal properties
Coastal properties are facing escalating flood risks due to sea level rise and storm surge erosion.
California homes and commercial buildings
California homes and commercial buildings remain at heightened risk from wildfires, which are growing in intensity and reaching further into the urban-wildland interface.
Rebuilding costs
Rebuilding costs have soared due to inflation in materials and labor shortages, making claim payouts more expensive—and premiums more volatile.
What Do These Changes Mean for Property Owners?
In response to these trends, some property owners are choosing to buy in lower-risk areas or forgo coverage altogether due to affordability concerns. But for others—especially those who have inherited property or are tied to a location for business or personal reasons—those options aren’t always realistic.
This has led to a growing protection gap: property owners who remain underinsured or uninsured altogether due to rising premiums.
How Can Property Owners Navigate These Increases?
If you own commercial or residential property in a high-risk zone, there are still proactive steps you can take:
Mitigation Discounts
Ask your insurance provider about discounts for implementing risk-reducing improvements like fire-resistant roofing, flood barriers, or hurricane shutters.
Work With a Specialist
Consult with an experienced insurance advisor before buying a property—or if you already own one—to understand the full risk profile and coverage options.
Don’t Go It Alone
Policy complexity is increasing, and markets are shifting quickly. The right advisor can help you navigate carrier changes, explore surplus lines markets, and build a custom risk management strategy.
Learn More About Apex Risk & Insurance Services
Apex brings the high-touch service proposition back to San Diego businesses and beyond.
At Apex Risk & Insurance Services, we use the Apex Proven Process to learn about your business, strategize to assemble the right program for you, and use our deep industry and market knowledge to leverage the best pricing and coverage.
This leaves small business owners with more time to do what they do best: Run their business knowing that their company and employees are protected.
Check out our commercial insurance policies, then, read on to learn what makes us different.
