California and Florida are frequently pitted against each other, but some residents in both states share the same problem: home insurance is either difficult to get or absurdly expensive, thanks to the looming threat of natural disasters.
Florida was the fastest-growing state in 2022, according to the Census Bureau. All the recent transplants have contributed to an increase in housing prices, leading to CBS News dubbing it the "least affordable" US state. The home affordability issue has been compounded by rising insurance premiums in the hurricane-prone state.
Several home insurance providers have pulled out of the state altogether, despite efforts by state lawmakers to make the market more stable. By the end of 2022, the average home insurance premium in Florida was $4,200, or three times the national average, according to The Guardian.
The premiums have gotten so expensive that some Floridians are leaving their coastal homes and moving inland, while some longtime residents are leaving the state altogether.
Former Florida residents Natalia and John told Insider's Jordan Pandy that they had to leave after their homeowners insurance skyrocketed to $12,000. The lifelong Florida residents said they moved to a town in Wisconsin where they could get a lot more bang for their buck.
"We didn't want to leave Florida. We just didn't see a future there for our kids," John said. "And if there was a future, it was a future of hardship."
But the home insurance problem is not unique to Florida. Across the country, another form of natural disaster is complicating homeowner's insurance in the West, including California.
Many top home insurance agencies have pulled out or limited their business in California, citing growing wildfire risks as a key factor. Allstate, which announced in November it was pausing new homeowners insurance policies, said in a statement at the time: "The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes and higher reinsurance premiums."
California has had four of its five largest wildfires in the past three years alone. Millions of Californians could be impacted by the home insurance disruptions, as more than 25% of Californians live in areas that are considered at an extremely high risk of fire.
Nick, a California resident whose home burned to the ground in the 2022 McKinney Fire, told Insider's Catherine Boudreau and Dan Latu that his house was not insured because it was too expensive. In addition to his house, much of his community was destroyed, and he's unsure if it will ever be rebuilt.
California officials announced last month it would now allow insurance companies to consider climate change when setting their rates, in hopes that it will keep more insurers in the state.
"Modernizing our insurance market is not going to be easy or happen overnight," California Insurance Commissioner Ricardo Lara, said, according to AP. "We are in really unchartered territory and we must make difficult choices when the world is changing rapidly."
