If you think the cost of buying a house has gotten high, buyers and homeowners are also grappling with surging costs to insure their properties—and some of the country’s wealthiest enclaves are feeling it more than others.

Home insurance rates have risen for homes in every sector nationwide, but luxury residences are seeing the greatest increases. According to The Wall Street Journal, which cited data from Citizens Financial Group, premiums for mortgage loans of over $1.5 million rose a whopping 130 percent between mid-2020 and mid-2024. By contrast, costs increased just 12 percent for mortgages between $400,000 and $800,000 within that same time period.

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The biggest jumps in insurance rates have been in Florida and California, two areas where there has been an increase in the frequency and severity of weather events. Most recently, Hurricane Helene tore across several states in the southeast, and not even two weeks later, Hurricane Milton plowed through the Sunshine State’s Gulf coast. Potential insurance losses from the back-to-back storms are still being estimated. However, Moody’s RMS Event Response has forecasted that insurance losses from both hurricanes will likely range between $35 billion and $55 billion.

Naturally, homeowners will pay more for properties that sit on the coast, near a forest, or by the desert, all of which are considered high-risk markets when it comes to climate disasters. As a result, several major carriers have pulled out completely from some states, including Florida and California.

“What I’m hearing companies saying is, I have less of an appetite for high-end homes,” Dale Porfilio, chief insurance officer at the Insurance Information Institute, told the WSJ. “Because that is an awful lot of money to put at risk for a single home that could be destroyed.” In the Golden State, companies including State Farm and Allstate announced they would stop offering new policies. In addition, the former will reportedly cut one million policies by the end of 2028. For those seeking an alternative, owners are now looking into self-insurance or dropping their coverage entirely.

The skyrocketing costs of home insurance, if it can be obtained at all, along with a surplus in inventory and waning buyer interest, have already begun to have a pronounced effect on real estate markets in sensitive locations, with more and more opting to move and settle in areas less prone to natural disasters. Sandra Beckett, a former resident of West Palm Beach, recalls selling her home last year due to the rising rates. Per Beckett and her husband, their premium was about to go from a couple hundred dollars to over $8,000. “It was scary to be honest,” she told the newspaper. “I don’t think I will ever own another home in Florida.”

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