‘More Stuff’ Is Leading to More Insurance Problems

Changing climate risk isn’t the only reason natural disasters are getting more expensive. It’s also because people keep building in high-risk areas of the United States.

Data show that some of the fastest-growing areas in the country experience frequent severe weather, which in turn contributes to rising home insurance costs, according to Insurify’s home insurance report.

“Whether the intensity of wildfires is exacerbated by climate change is an open question,” Jerry Theodorou, director of the finance, insurance, and trade policy program at R Street, wrote in an analysis. “[T]he main reason catastrophe severity has risen is an increase in the built environment — there is simply more stuff now to be destroyed.”

Growing cities face climate risk

A 2025 analysis from CoreLogic reviewed factors like new construction and changes in land-use designation to determine the top 10 fastest-growing U.S. cities. They are:

1. Lakeland, Florida

2. Austin, Texas

3. Raleigh, North Carolina

4. Dallas, Texas

5. Port St. Lucie, Florida

6. San Antonio, Texas

7. Wilmington, North Carolina

8. Cape Coral, Florida

9. Boise City, Idaho

10. Las Vegas, Nevada

Florida and Texas had the second- and third-fastest population growth rates from 2023 to 2024, according to the U.S. Census Bureau. They also feature prominently on CoreLogic’s list. And seven of those 10 cities are in counties with “relatively high” climate-related risks, per the Federal Emergency Management Agency (FEMA) National Risk Index.

Home insurance is already costly in most of those places. For example, the national average cost of home insurance is $2,584 per year, according to Insurify data. The current annual averages are $13,157 in Port St. Lucie, $8,961 in Cape Coral, $4,978 in Dallas, and $3,443 in San Antonio, per Insurify data.

Of course, several factors influence home insurance rates.

“Catastrophe loss costs incurred by property insurers from severe weather and climate events are among the factors that impact the cost of home insurance,” Mark Friedlander, chief communications officer for the Insurance Information Institute, told Insurify. “Other factors include the cost of reinsurance, rising replacement costs, and the volume of litigated claims.”

All of those, however, can affect how much insurance companies need to pay out for a home insurance claim. Friedlander noted that insurers base rate changes on local market data. So, any relatively frequent event that causes damage, from vandalism in an urban area to a hurricane along the coast, could raise regional rates.

Most major cities already managing severe weather

Los Angeles, the second most populated city in the U.S., and neighboring areas are still recovering from devastating wildfires. The fires killed at least 29 people, according to the Los Angeles County Medical Examiner. They also caused an estimated $75 billion in insured losses, according to the UCLA Anderson Forecast.

Los Angeles is far from the only major U.S. city facing significant climate risks. All top 10 most populous U.S. cities are in counties facing very or relatively high climate-related risks, according to the U.S. Census Bureau and FEMA.

Industry leaders agree that climate catastrophes are becoming increasingly severe, though they disagree whether they’re increasing in frequency, according to an R Street report. Some blame climate change, others socioeconomic factors.

Whatever the cause, the incidence of billion-dollar climate events is increasing, according to the National Oceanic and Atmospheric Administration (NOAA). At least in the case of hurricanes, “the recent increase in societal impact from tropical cyclones has largely been caused by rising concentrations of population and infrastructure in coastal regions,” NOAA suggests.

What’s next: Will motivations for moving change?

In 2022, 0.3% of people reported moving because of a “natural disaster,” according to a U.S. Census Bureau survey. But 7.7% reported moving to find “cheaper housing,” and 8.5% said it was because they wanted to own a home instead of renting.

Even though insurance can be a significant expense for homeowners, high-risk areas like Texas and Florida continue to see population growth. Texas, in particular, experienced an influx of new residents moving from out of state in 2024, according to the U.S. Census Bureau.

“The trend of more people living in harm’s way of catastrophes plays a role in the cost and availability of property insurance across the country,” Friedlander said. “More Americans than ever before want to live near the coastline, but it comes with a price.”

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