The home insurance market is crumbling in New Orleans, leaving Alfredo Herrera with few options for coverage — and skyrocketing insurance premiums.
Herrera, 35, works in finance for a local bank. He bought his 900-square-foot home in New Orleans’ Mid-City neighborhood in 2020 for $270,000, and lives there with his partner.
In 2022, he paid $1,600 a year for home insurance. But last July, his insurer canceled his coverage, saying it was leaving Louisiana.
In the past, acquiring or keeping homeowners’ insurance didn’t present much of a problem.
But as climate change increases the frequency and severity of extreme weather, insurers — especially those in areas most impacted by floods and fires — are raising their premiums, or pulling out altogether, impacting the affordability and availability of home and fire insurance.
I would have thought California EQ was the peril scaring them all away. Very expensive to reinsure - most commercial property catasrophy models (RMS & AIR are the big ones) peg it as the second most risky North American peril after Florida Hurricane.
Then those models are fucking shit. San Francisco and Los Angeles are in no danger from wildfire.
EQ is earthquake. According to USGS, California faces a ~75% chance of a major earthquake in the next 100 years.
Have a quick google of “California quake risk” for a slew of in-depth (and somewhat scary) articles and research papers.
Home insurance already doesn’t cover earthquakes though. That’s a separate insurance product, and companies could just stop offering it.