Home insurance, once a reliable shield for homeowners, is becoming harder to get and more expensive, especially for wealthy families in disaster-prone areas like California and Florida. Rising costs, reduced coverage, and fewer companies willing to insure high-value properties are pushing some homeowners to consider skipping insurance altogether.
Charley Todd, who runs Charley Insurance, focuses on helping wealthy clients in places where traditional insurers have pulled back. He says more of his clients are thinking about self-insuring because premiums have soared and policies often only cover parts of their homes. “Ten years ago, no one questioned the value of home insurance,” Todd said. “Now, I hear more talk about going without it.”
The reasons are clear. Natural disasters like wildfires in California and hurricanes in Florida are happening more often and are worse than predicted. This throws off insurance models and creates chaos in the market. Because insurance relies on global reinsurance, problems in one part of the world make things tougher everywhere, including American markets already facing climate risks.
In Florida, hurricanes have driven some insurers to bankruptcy or made them exit the market. In California, many luxury homes are in areas highly vulnerable to wildfires or storms. Todd notes that the most sought-after places to live often come with the highest disaster risks. This mismatch is making insurance a challenge for those homeowners.
Wealthy property owners often have to piece together coverage from several insurers to protect their entire estate. Different policies might be needed for the main home, guest houses, pools, art collections, and even special types of roofs. Todd shared that it’s common to work with three or four insurers just to get full coverage. This patchwork leads to very high premiums—sometimes as high as mortgage payments—and gaps in protection.
Even when insurance is in place, important possessions like fine jewelry, wine collections, or custom pools can be left uncovered if policies aren’t carefully checked. Many high-net-worth clients also require special protection for costly art, collectibles, and extended rebuilding costs due to rising construction prices. Liability concerns unique to their lifestyles add yet another layer of insurance needs.
Insurance agents face limits too. Regulations can stop companies from charging rates that truly reflect the risk, making it harder to offer adequate coverage. In response, some agencies are using new tools like satellite data, AI, and more detailed risk mapping. These technologies help them show insurers which homes are less risky than general area maps suggest, unlocking chances to insure properties that seemed off-limits before.
Todd believes agencies that combine personal knowledge with smart technology will have an edge. His company works with more than 40 insurers to find custom solutions for wealthy families, aiming not just to sell policies but to help clients through a fractured market.
He also warns that some areas could become impossible to insure if disaster risks keep climbing unchecked. Still, he is hopeful. New options like surplus lines insurance, tech-driven companies, and private investment money might provide answers, though covering these homes may come at a high cost.
“There will always be someone willing to write a policy,” Todd said, “but if the cost of insurance makes owning a home impossible, then we have a big problem.”
As the climate changes and disasters increase, the future of home insurance, especially for the wealthy, looks uncertain. Families in vulnerable areas might face tough choices about protecting their homes or even owning them.