The least affordable housing market in more than a generation is facing another threat: Uninsurable properties

Garret Gray sort of laughs when he tells Fortune about how his house in a Los Angeles canyon was nearly uninsurable. Surrounded by brush, “it’s got a really bad CoreLogic fire score,” he says. And he should know: As the president of CoreLogic’s global insurance solutions business, he knows how the changing insurance scene is shaking up real estate.

The extreme weather problem costs the country $23 billion a year and counting (last year saw 23 major weather events that caused at least $1 billion in damage), and it’s wreaking havoc on homeowners’ insurance in climate risk-prone states. The California and Florida housing markets are staring down a bona fide insurance shock.

Lately, homeowners’ insurance in California has been a mess, with property insurers either capping the number of policies they write in the state or simply refusing to write new homeowner policies altogether. Consider State Farm, California’s largest home insurer, which last year announced that it would stop accepting new applications for property insurance because of “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.” And now, State Form is reportedly raising rates by an average of about 20% this year. “These rate changes are driven by increased costs and risk,” the company said in a statement to the San Francisco Chronicle.

What’s happening in California mirrors trends across the country, Amy Bach, the cofounder and executive director of United Policyholders, said. The insurance crisis is just as acute in wildfire-prone California as it is in hurricane-prone Florida — although the latter has been at the forefront of the problem, Bach told Fortune. Florida has lost multiple home insurers as they flee the state. And this insurance shock is only going to get worse as the severity and frequency of extreme weather events is increasing.


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