\n<\/p>\n
This Louisiana resident expects to pay 45 percent more for home insurance this year.<\/p>\n
Similar increases are hitting homeowners across the state, where insurance costs have exploded over the past four years.<\/p>\n
It\u2019s part of a rapid shift that\u2019s sending tremors through real estate markets across the country.<\/p>\n
By Claire Brown and Mira Rojanasakul. Photography by Emily Kask.<\/span> <\/p>\n Claire Brown traveled to Louisiana for this article and Mira Rojanasakul combed through troves of data. Both spoke with homeowners, policymakers and insurance experts.<\/p>\n Nov. 19, 2025 <\/p>\n Even after she escaped rising floodwaters by wading away from her home in chest-deep water during Hurricane Rita in 2005, Sandra Rojas, now 69, stayed put. A fifth-generation resident of Lafitte, La., a small coastal community, she raised her home with stilts.<\/p>\n But this year, her annual home insurance premium increased to $8,312, more than doubling over the past four years.<\/p>\n She considered selling, but found herself in a dilemma. As insurance costs have risen, area home values have fallen, dropping by 38 percent since 2020. The roadsides around her house are dotted with for-sale signs.<\/p>\n \u201cThey won\u2019t insure you,\u201d Ms. Rojas said. \u201cNo one will buy from you. You\u2019re kind of stuck where you are.\u201d<\/p>\n Sandra Rojas is a fifth-generation resident of Lafitte, La.<\/span> <\/p>\n New research shared with The New York Times estimates the extent to which rising home insurance premiums, driven higher by climate change, are cascading into the broader real estate market and eating into home values in the most disaster-prone areas.<\/p>\n The study, which analyzed tens of millions of housing payments through 2024 to understand where insurance costs have risen most, offers first-of-its-kind insight into the way rising insurance rates are affecting home values.<\/p>\n Since 2018, a financial shock in the home insurance market has meant that homes in the ZIP codes most exposed to hurricanes and wildfires would sell for an average of $43,900 less than they would otherwise, the research found. They include coastal towns in Louisiana and low-lying areas in Florida.<\/p>\n Changes in an under-the-radar part of the insurance market, known as reinsurance, have helped to drive this trend. Insurance companies purchase reinsurance to help limit their exposure when a catastrophe hits. Over the past several years, global reinsurance companies have had what the researchers call a \u201cclimate epiphany\u201d and have roughly doubled the rates they charge home insurance providers.<\/p>\n Source: Keys and Mulder (National Bureau of Economic Research, 2025).<\/span> The New York Times<\/span><\/p>\n Benjamin Keys at the Wharton School of the University of Pennsylvania and Philip Mulder of the University of Wisconsin-Madison, the authors of the study, which was published this week, have called these swift changes \u201ca reinsurance shock.\u201d For some Americans, these changes have made it unaffordable to remain in homes they have lived in for decades.<\/p>\n \u201cHomeowners don\u2019t appreciate or don\u2019t understand that we are living in a much riskier world than we were 25 years ago,\u201d Dr. Keys said. \u201cAnd that risk? They have to pay for it.\u201d<\/p>\n After analyzing 74 million home payments \u2014 which included mortgage, taxes and insurance and were made between 2014 and 2024 \u2014 the researchers found that a rapid repricing of disaster risk had been responsible for about a fifth of overall home insurance increases since 2017. Another third could be explained by rising construction costs.<\/p>\n The researchers estimated the effects of the reinsurance shock on home prices in the ZIP codes most vulnerable to catastrophes. They found that rising insurance premiums weighed down home values by about $20,500 in the top 25 percent of homes most exposed to catastrophic hurricanes and wildfires, and by $43,900 in the top 10 percent.<\/p>\n Buying a home has long been seen as a way to lock in predictable housing costs. But the fast-increasing burden of insurance is catching some homeowners by surprise.<\/p>\n Last year, Ms. Rojas\u2019s brother-in-law, who lived down the road in Lafitte, decided to sell his home to escape the area\u2019s rising premiums. It sold for $150,000, which is what it cost him to build it in 1984. He estimated he lost about $75,000 on the sale, after accounting for the cost of renovations.<\/p>\n In parts of the hail-prone Midwestern states, insurance now eats up more than a fifth of the average homeowner\u2019s total housing payments, which include mortgage costs and property taxes. In Orleans Parish, La., that number is nearly 30 percent.<\/p>\n Source: Keys and Mulder (National Bureau of Economic Research, 2025).<\/span> The New York Times<\/span><\/p>\n A hundred miles north of Lafitte, the small city of Bogalusa, La., lies further inland. Nevertheless, Cristal Holmes saw her insurance premium more than quadruple in 2022, to $500 per month, on top of her $700 monthly mortgage.<\/p>\n Ms. Holmes, a single mother who was working 56 hours a week at a warehouse, struggled to keep up with the higher bills. She fell behind on mortgage payments after her work hours were reduced to 35 per week. She worried she couldn\u2019t stay in her home.<\/p>\n Similar stories are playing out all over town. Ms. Holmes\u2019s real estate agent, Charlotte Johnson, said her office was getting phone calls every day from people who said they could no longer afford their rising insurance premiums. For many, dropping insurance is not an option, because banks refuse to offer or maintain mortgages for people without coverage.<\/p>\n That means owners are being forced to choose between accepting home insurance policies they can\u2019t afford or risking foreclosure.<\/p>\n Buyers face their own obstacles. High insurance prices and interest rates are making it harder than ever for first-time buyers to purchase homes, said Nancy Galofaro-Cruse, a senior loan officer with CMG Home Loans who works with many of Ms. Johnson\u2019s clients. She estimated that more than a third of would-be buyers in the area backed out of the market this year after insurance and interest rates pushed their total monthly housing costs out of reach.<\/p>\n For-sale signs dot roadsides In Lafitte, La., where high insurance costs have driven residents to sell.<\/span> <\/p>\n It\u2019s not just the hurricane-prone coasts that have been affected by the reinsurance shock. In Colorado, where wildfires and hail pose the biggest threats to homes, the average homeowner\u2019s premium has more than doubled in the last decade and median premiums have increased 74 percent since 2020.<\/p>\n Steve Hakes, an insurance broker with Rocky Mountain Insurance Center in Lafayette, Colo., has seen clients consider homes in wildfire-prone areas, only to back out when they can\u2019t find affordable insurance. High prices and limited availability have pushed him to advise buyers to look for insurance early in the homebuying process.<\/p>\n And in California, 13 percent of real estate agents surveyed by an industry trade association said they\u2019d had deals fall through in 2024 after buyers couldn\u2019t find affordable insurance coverage.<\/p>\n Colorado regulators are aware of the threats these dynamics pose to the real estate market and are exploring a wide range of fixes, said Michael Conway, the Colorado insurance commissioner.<\/p>\n \u201cWe don\u2019t want a situation where the insurance market is effectively decimating the real estate market,\u201d he said.<\/p>\n As insurance becomes more expensive, home values will need to adjust for potential buyers to afford their monthly costs, industry analysts say. And if home values fall, lower property tax revenue could mean less money for local governments to pay for essential services or affect the ability of those governments to borrow money.<\/p>\n Clarence Guidry reached a breaking point this year when he got a quote to insure his home in Lafitte, La. He\u2019d pay a $20,000 annual premium but if a hurricane struck, he\u2019d be on the hook for the first $50,000 in damage before the insurance company would pay out.<\/p>\n His lender wouldn\u2019t let Mr. Guidry, who goes by Rosco, keep his mortgage without home insurance. But keeping his home insured against damage from hurricanes would mean stomaching monthly payments that are at least 40 percent higher than the rest of his monthly mortgage and property taxes combined.<\/p>\n Clarence Guidry, a homeowner in Lafitte, La., would need to cover the first $50,000 in hurricane damage before his home insurance would kick in.<\/span> <\/p>\n Over the last decade, as the number of wildfires and storms has mounted, losses have exceeded the revenue insurance companies receive from home insurance policies across the United States. In Louisiana, 12 companies, including Mr. Guidry\u2019s insurer, became insolvent after a wave of hurricanes between 2021 and 2023. (Most private insurers do not cover flood damage, which is handled separately under a federal program.)<\/p>\n Note: Data shows U.S. property catastrophe prices indexed to 1990.<\/span> Source: Guy Carpenter.<\/span> The New York Times<\/span><\/p>\n Insurance companies\u2019 own costs have climbed in recent years for a variety of reasons, including higher construction costs, higher interest rates and President Trump\u2019s tariff policies.<\/p>\n But the changes in the insurance market have begun to put a higher price on risk. Reinsurers have been driving these effects, Dr. Mulder said.<\/p>\n \u201cThese reinsurers are looking at a lot of the same data as insurers, but at a much bigger scale and with more sophistication,\u201d he said.<\/p>\n Politicians, homeowners, economists, state insurance commissioners and real estate agents have long worried that insurance costs will rise so much that they will begin to pull down home values.<\/p>\n According to the study by Dr. Keys and Dr. Mulder, which was published as a working paper in the National Bureau of Economic Research, this is already happening in some areas.<\/p>\n Jesse Keenan, an associate professor of sustainable real estate and urban planning at Tulane University, said the direct evidence of this phenomenon remained limited and there were factors beyond insurance that affected local home prices.<\/p>\n But there are increasingly troubling signs in some markets, he said.<\/p>\n \u201cThe New Orleans housing market is exhibiting signs of failure that are imposing stress on the financial system around it,\u201d he said.<\/p>\n Overall, U.S. home prices have risen about 55 percent since 2018, but New Orleans prices have increased by only 14 percent, less than the rate of inflation over the same time period.<\/p>\n Note: Chart shows change in Zillow Home Value Index since 2018.<\/span> Source: Zillow.<\/span> The New York Times<\/span><\/p>\n Even in states where heavy regulations have kept costs down, there are signs that home insurers will continue to raise premiums to align more closely with disaster risk. New rules in California allow insurance companies to pass rising reinsurance costs on to consumers. One consumer advocacy group, citing the effects of similar changes in other states, has estimated this provision could raise net premiums significantly for homeowners.<\/p>\n Back in Lafitte, Mr. Guidry was running the numbers for his own budget. Against the advice of his financial adviser, he took money out of his retirement account to pay off his home loan. The plan now is to self-insure for wind and hail damage. That means he and his wife will have to pay out of pocket to repair their home if another severe storm hits.<\/p>\n In forgoing coverage, the Guidrys join some 13 percent of U.S. homeowners who are uninsured, according to Census Bureau data. Insurers continue to drop people in many areas.<\/p>\n \u201cNow, we\u2019ve got to take the gamble,\u201d Mr. Guidry said.<\/p>\n Methodology<\/p>\n Benjamin Keys and Philip Mulder calculated annual homeowners\u2019 insurance costs by separating mortgage and tax payments from loan-level escrow data obtained from CoreLogic, a property and risk analytics firm. Households whose payments were captured by CoreLogic were not necessarily present in all years of data from 2014 to 2024.<\/p>\n The home insurance share of total home payments are based on mean values. Total home payments include insurance, property tax and mortgage principal and interest costs. Escrow payments typically do not include utilities, homeowners\u2019 association fees.<\/p>\n","protected":false},"excerpt":{"rendered":" This Louisiana resident expects to pay 45 percent more for home insurance this year. Similar increases are hitting homeowners across the state, where insurance costs have exploded over the past four years. It\u2019s part of a rapid shift that\u2019s sending tremors through real estate markets across the country. By Claire Brown and Mira Rojanasakul. 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