In August of this year, Hurricane Debbie unleashed its fury on the Southeast coast, inundating numerous beachfront mansions seemingly overnight. As extreme weather events become increasingly common, these once-desirable properties have come to be perceived as high-risk areas. This shift has resulted in soaring insurance premiums, with some homeowners even struggling to secure coverage. As a result, the market for selling such homes has turned particularly sour.

Ryan Harper and his wife, for instance, have experienced a staggering rise in their insurance costs, which doubled to over $7,000 per year for their home in Santa Clarita, California. Faced with these financial pressures, they placed their six-bedroom Spanish-style mansion on the market last year with an asking price of $1.25 million. However, even after cutting the price by $75,000, the property remains unsold after several months, largely due to its classification as a fire hazard zone. Harper voiced his frustration, stating, “Selling a property in California is as difficult as it gets right now; the insurance costs have just become unbearable.”

Data from Citizens Financial Group in Rhode Island indicates that insurance premiums for properties with mortgages exceeding $1.5 million skyrocketed by 130% from mid-2020 to mid-2024, while premiums for homes with mortgages ranging between $400,000 and $800,000 saw a smaller increase of 12%.

The recent devastation caused by Hurricane Helene, which led to an estimated $26 billion in damages across the Southeast, has forced many insurance companies to reconsider their presence in disaster-prone states like Florida and California, with some exiting the market or denying coverage outright. Former consumer lending executive Eric Schuppenhauer commented, “If you’re an insurance company, you’d see your risks triple overnight.”

Consequently, insurers are increasingly inclined to provide coverage for four $250,000 homes rather than one million-dollar property. Paulette Koch, a real estate agent specializing in Palm Beach mansions, has received an influx of inquiries from clients bewildered by the steep rise in premiums. She noted, “This is just part of the cost of living now.”

Dale Porfilio, Chief Insurance Officer at the Insurance Information Institute, acknowledged, “I’ve heard that the insurance industry is losing interest in luxury homes because when it comes to properties susceptible to disasters, it’s not worth investing substantial sums.”

Sandra Beckett and her husband were shocked to discover that their older home in West Palm Beach, Florida, required annual insurance premiums exceeding $8,000. Having owned the home for less than two years, they opted to sell. Beckett candidly shared, “Honestly, I don’t think I’ll buy another house in Florida.”

Meanwhile, Katja Pekrun, who owns a $1.2 million home in Menlo Park, California, is contemplating how to manage her financial exposure and plans to pay off her mortgage swiftly to sidestep escalating insurance costs. “I’m considering not purchasing homeowners insurance at all, as it’s just too expensive and downright crazy,” she remarked.