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South Florida’s tropical charm has captivated people for decades, alluring them with Mother Nature’s sprawling artwork and the creatures that inhabit her displays. But the same weather that keeps South Florida lush is the primary culprit responsible for annual assaults on homeowners‘ wallets: home insurance premiums.
A recent Realtor.com study looked at home insurance costs for the top 100 metros in the U.S. and found homeowners in the Miami, Fort Lauderdale, and West Palm Beach market paying the most, followed by four other Florida metros in the top 10. Realtor.com utilized home median market value and insurance data from Insurify to estimate the home insurance prices for comparison. The study then examined the flood, wind, and wildfire risk affecting each area.
In the Miami metro, where the median market value for a home is $614,000, homeowners pay about $22,718 per year for home insurance, accounting for about 3.7 percent of the market value in insurance costs. Median home prices in the other top ten markets with the highest insurance burdens were far lower than Miami’s, meaning insurance costs fall sharply after the No. 1 spot.
In the New Orleans metro area, another hurricane hotspot, homeowners spend about 3.6 percent of their home’s value on insurance, averaging $8,328 a year for a home worth $231,328. Homeowners in the rest of the top 100 metros in the nation spend an average of 0.8 percent of their home’s value, amounting to $3,485 for homes valued at $435,633.
To determine whether home insurance is considered affordable in a given area, real estate experts examine the insurance bill as a percentage of the home’s total value. The ratio between the two is displayed by a percentage, and anything above 2 percent is considered unaffordable; five of the top 100 metros fit that description: Miami (3.7 percent), New Orleans (3.6 percent), Cape Coral, Florida (2.2 percent), Oklahoma City (2 percent), and Baton Rouge, Louisiana (2 percent).
“In high-risk markets, homeowners face added insurance costs and gaps in protection: Flood coverage must be purchased separately, hurricane deductibles can reach 2% to 5% of the dwelling coverage, and wildfire insurance is often limited or unaffordable,” according to the Realtor.com study.
Flooding and powerful winds pose the greatest risks in Miami, which topped Realtor.com’s ranking of cities with the most home value exposed to severe flooding. The Miami metroplex has $306.8 billion in total home value facing severe flood risks. The New York, Newark, and Jersey City market in New York and New Jersey ranked No. 2, with $295.3 billion worth of homes at severe risk of flooding.
Miami also ranked at the top for the total value of homes at severe risk of wind damage, with about $1.3 trillion worth of homes in danger. Texas’ Houston, Pasadena, and The Woodlands market placed second, with $764.3 billion worth of homes vulnerable to wind damage.
“Overall, 26.1 percent of U.S. homes—representing $12.7 trillion in value—are exposed to at least one type of severe or extreme climate risk,” the study notes. “Understanding climate risk in the housing market is essential, as these challenges not only affect residential safety but also influence property values, insurance costs, and overall market stability.”
