Florida and California are expected to see problems escalate amid rising threat of natural disasters
Home insurance in places that have constantly suffered from natural disasters will be the top issue in housing affordability in the next four years, according to billionaire entrepreneur and investor Mark Cuban.
Writing on his Bluesky page, Cuban said that as buyers in the housing market continue to prioritize low interest rates in eyeing their new home, home insurance should also be a major factor for consideration.
“Home insurance in areas hit by repetitive disasters is going to be the number one housing affordability issue over the next four years. And possibly going into the midterms. More so than interest rates,” he said on the platform, emphasizing Florida’s possible predicament.
Bankrate Insurance Analyst Shannon Martin supported his idea, telling CNBC that it was “an accurate statement” as many other insurance experts agree.
Financial institutions often require homeowners to have coverage when legally owning a home, insuring them for damages to the house, related structures, personal property and liability. Individual factors can hike up the costs in such areas, with houses that have a higher likelihood of requiring claims to repair damages to weather events needing to pay more money.
Bankrate noted that Florida residents pay an average of $5,527 every year for $300,000 in dwelling coverage. As those living in disaster-prone areas would see more expensive coverages, Martin said that insurance companies were understanding extreme weather risks better.
“More insurance companies have been using technology and AI to get into predict-and-prevent mode instead of a reactive mode. They’re starting to be able to pinpoint what homes are really at the higher risk, narrow it down,” said Martin.
Experts also highlighted the potential for tariffs on materials entering the US from abroad under the incoming Trump administration to spike building costs.
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