Miami Homeowners Pay 3.7% of Value in Annual Storm Premiums—Highest in Nation

A new report from Realtor.com has revealed that one in every four U.S. homes—representing $12.7 trillion in real estate value—is exposed to "severe or extreme" climate risks, including flooding, hurricanes, and wildfires. The analysis, conducted by economist Jiayi Xu and in collaboration with First Street, highlights how these risks are reshaping housing markets, increasing financial burdens on homeowners, and driving up insurance costs nationwide.

The report identifies flood risk as one of the most underestimated threats. Approximately 6 million homes, valued at $3.4 trillion, are at risk of severe or extreme flooding over the next 30 years, significantly exceeding the number of homes identified by FEMA’s current Special Flood Hazard Area (SFHA) maps. The discrepancy arises because FEMA’s maps do not fully account for heavy rainfall or projected climate change effects. Coastal metro areas such as Miami, New York, and Houston bear the largest financial exposure, with Miami alone holding $306.8 billion in at-risk property value. New Orleans, meanwhile, leads in the share of its housing stock—88.9%—at severe or extreme flood risk.

Hurricane wind damage also poses widespread threats. According to the report, 18.3% of U.S. homes—valued at nearly $8 trillion—are at severe or extreme risk of wind damage. In 14 major metropolitan areas, including Miami, Houston, and Tampa, all homes face this level of risk. These often overlap with flood risks, compounding the challenges for coastal homeowners. Insurance costs in such areas have surged, with Miami homeowners paying an average of 3.7% of their home’s value in annual premiums—the highest rate among the 100 largest metro areas. This is further compounded by high hurricane deductibles, which can reach 5% of the policy value.

Wildfire risk, though more geographically concentrated, is also intensifying. California accounts for nearly 40% of the $3.2 trillion in at-risk property value, with Los Angeles and Riverside as key hotspots. The state’s insurance market is under severe strain, with its FAIR Plan—a high-risk insurance pool—growing to $650 billion in total exposure since 2021. Outside of California, cities like Colorado Springs and Tucson face similarly elevated wildfire risks, with over 75% and 60% of their property values at risk, respectively.

The surge in insurance premiums, coupled with the increasing frequency of disasters and the growing difficulty in securing coverage, is reshaping housing dynamics. Markets in lower-risk regions are expected to see stronger home price growth as climate-driven migration accelerates. Danielle Hale, Chief Economist at Realtor.com, emphasized that while the types of risk vary by region—flooding in the Northeast, wildfires in the West, and hurricanes in the South—the financial consequences are increasingly felt nationwide. Hale noted that this report is part of a five-year effort to raise awareness about the magnitude of these risks, which are often underestimated by homeowners and policymakers alike.

The report also points to the urgent need for updated risk modeling and improved data accessibility. First Street’s models differ from FEMA’s, revealing that many homeowners are unaware of their flood risk due to outdated maps. For example, New York has a $95.3 billion gap in flood risk exposure, while Los Angeles and San Francisco have $65.6 billion and $54.9 billion, respectively. As these risks continue to evolve, the insurance and housing sectors are under pressure to adapt. Fannie Mae’s CEO has acknowledged the urgency of the situation, even referencing Beyoncé’s lyrics about insurance deserts in highlighting the growing crisis.

In response, the real estate market is beginning to see a shift in buyer behavior, with increasing demand for transparency about property risk levels. However, the complexity and cost of securing insurance in high-risk areas remain significant barriers to affordability and accessibility. As the housing market grapples with these challenges, policymakers, insurers, and developers must work together to create more resilient, climate-adapted infrastructure and policies that protect both homeowners and communities.

Source: [1] One out of every 4 homes is at 'severe or extreme' climate risk, study says (https://fortune.com/2025/09/03/housing-real-estate-climate-risk-insurance-12-7-trillion-one-in-four/) [2] More Than $12 Trillion in U.S. Homes Face Severe Climate Risks New Realtor.com Analysis Finds (https://realtytimes.com/headlines/item/1052658-more-than-12-trillion-in-u-s-homes-face-severe-climate-risks-new-realtor-com-analysis-finds?rtmpage=) [3] A novel climate assessment framework for integrating (https://www.sciencedirect.com/science/article/abs/pii/S2212095525003050) [4] Climate-proofing real estate (https://www.costar.com/article/1800590993/climate-proofing-real-estate) [5] Than $12 Trillion in U.S. Homes Face Severe Climate Risks (https://finance.yahoo.com/news/more-12-trillion-u-homes-100000745.html) [6] Hidden flood risks: 1 in 4 U.S. homes face severe climate (https://www.wral.com/news/state/us-homes-severe-climate-risk-sep-2025-raleigh/)