The housing market's insurance shock, as explained by CoreLogic Chief Data Officer John Rogers

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According to a recent analysis of CoreLogic data by the National Bureau of Economic Research, the median annual U.S. home insurance premium rose 33% between 2020 and 2023.

Over the past few years, disaster and climate risks, combined with the higher cost of replacement due to soaring construction costs, have helped drive up home insurance premiums.

To better understand what’s going on, I interviewed John Rogers, CoreLogic’s Chief Data and Analytics Officer, at ResiDay in New York City earlier this month. There aren’t many firms that understand how disaster/climate risk is impacting the housing market better than CoreLogic, which equips insurers with tools to evaluate and price climate-related risks into home insurance. Through its data, analytics, and risk modeling solutions, CoreLogic enables insurers and investors to assess risks from natural hazards—such as floods, wildfires, hurricanes, and earthquakes.

For today’s ResiClub article, we’re presenting the slides (plus some commentary) that Rogers showed during his ResiDay presentation.

“Property insurance has risen sharply over the past three… Places like Florida have risen up 68%—that’s making housing very tough for homeowners and those trying to enter the market,” Rogers told the ResiDay crowd.

I then asked Rogers why home insurance in Florida is up so much?

"There are a number of reasons. One [reason] obviously is hurricanes... You saw two with Helene and Milton just recently. About 15% of [home insurance] claims nationwide are in Florida, unfortunately 71% of all [home insurance] lawsuits against claims are in Florida,” Rogers said. “What is really encouraging is the Florida governor has put new legislation to really curb that number down so there’s not as many lawsuits. Because if you have a pot of money for claims to restore your home but [some] of that is going to other actors [like lawsuits] in the transaction. So that [legislation] would [help] bring premiums down.”

While disaster risk is one reason that home insurance premiums are rising faster than overall consumer inflation, it isn’t the only reason. A portion of the increase in home insurance premiums stems from rising housing and construction costs, which soared during and following the pandemic. Replacement and repair costs have soared, and insurers are trying to keep pace, although some state insurance commissions are slowing the process.

According to John Rogers at CoreLogic here are the six main factors driving up home insurance rates 👇

According to CoreLogic…

In 2024, 9% of U.S. housing stock is at “very high climate risk.”

By 2050, 16% of U.S. housing stock will be at “very high climate risk.”

One reason it's expected to increase, Rogers says, is that new construction is elevated in the very places with the most risk.

LEFT MAP BELOW: Where the most homes are being built, as measured by parcel growth

RIGHT MAP BELOW: The housing markets most at risk of disaster claims

Rogers says “you can see there is a correlation between” disaster/climate risk and where homes are actually getting built.

“We [U.S. homebuyers] do have an attraction for the coasts, the Southeastern coast and across the West—these are desirable places to live,” Rogers says. “But 7 of the top 10 areas [for disaster risk] are still appreciating [for home prices] despite being very high risk.”

Rogers says some well-intentioned state regulations have contributed to “insurer pressures and market retreat and emergency of inadequately capitalized insurers.”

What can homeowners, homebuyers, real estate investors, and insurers do to limit insurance risk?

“There are many things insurers, federal groups, and ourselves are trying to do. We’re trying to inform the homeowner how they can make their home more resilient. And I’ll give a quick example, at CoreLogic we analyze every [U.S.] home and basically say does the homeowner meet the 12 resiliency factors. So in California, is your fence 12-foot away, and you have no flammable material within 5-feet, you have a certain type of roofing—we can send that signal to the insurer, and the insurer can reach out to [the homeowner] and reduce your wildfire insurance. So we’ll see a lot more of that come into place,” Rogers told the ResiDay crowd.

According to Rogers at CoreLogic, Hurricane Helene’s precipitation was a 1 in 1,000 event, and only around 1% of those impacted in the Carolinas actually had flood insurance through the national flood insurance program.

If parametric insurance—a contract that insures a policyholder against the occurrence of a specific event—were further expanded and adopted, it could alleviate some of the losses absorbed by homeowners, he said.

“Parametric insurance is a cheaper way for homeowners to have some insurance for very rare events, like 1 in 500 year events like hail over 2 ½ inches, hurricanes over a certain speed… I think we’ll see more parametric insurance come in, it’s already used a lot in the commercial [real estate] industry,” Rogers said.

At ResiDay, I asked Rogers how much he expects U.S. home insurance premiums—which rose 11% last year—to increase in 2025.

Rogers acknowledged that there is still upward pressure on insurance rates. However, he noted that it’s challenging to predict the size of a national increase for next year.

“I wish I had a crystal ball. Unfortunately with the rise and frequency and intensity in weather perils, there is pressure on that [home insurance] to rise. The good news is that insurers have more access now, plus state groups and federal entities, to very granular data. So that they can really understand the risk profile per house, it sounds obvious but every property is different, and we [CoreLogic] are helping insurers and federal agencies price risk appropriately to do that” Rogers said.

You can watch Rogers’ full ResiDay interview below: