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Helping Clients Cope With The Home Insurance Crisis
Some economists worry that homes in disaster-prone areas could become uninsurable . By Ben Mattlin
IN RECENT YEARS , CATACLYSMIC NATURAL DISASTERS across the U . S . have been not only tragic but expensive . Hurricanes Debby , Helene and Milton , which pummeled the Southeast in 2024 , caused roughly $ 5.4 billion in insurance losses , according to official estimates . Then , in January 2025 , wildfires in Southern California resulted in another $ 45 billion in damages , as estimated by Irvine , Calif . -based CoreLogic .
This financial gut-punch has led some economists to predict that high-risk areas could soon become uninsurable . What are homeowners supposed to do ? Is there any reasonable solution to what seems to be an intractable problem ?
“ All stakeholders are looking at the way forward ,” says Janet Ruiz at the Insurance Information Institute , an industry-funded consumer education organization in New York City .
She cites efforts to improve infrastructure , with less disaster-prone roadways and electricity grids and water systems , as well as revamped building codes that require homes and busi- nesses to be more resilient to fires , floods and wind gusts . But she adds that there are many challenges , including increasing climate dangers and the rising costs of construction , building supplies , temporary housing , legal protections and reinsurance . ( Reinsurance is essentially insurance for insurance companies , enabling them to offset a degree of liability .)
“ Many communities are taking action to become resilient to the risks they face , through planning , mitigation , grants , bonds , building codes and innovative ways to predict and prevent future loss and devastation ,” she says . “ Risk management , new products [ and ] technology are all part of the future of insurance .”
There ’ s certainly been no shortage of finger-pointing , as commentators have blamed the disasters on everything from environmental mismanagement to municipal malfeasance , regulatory overreach , heedless homeowners and greedy insurance companies . The wide-ranging accusations perhaps only reveal the complexity of the situation .
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