Climate risk: the insurance-first underwriting framework
93% of homeowners are concerned about climate damage. 49% may move because of it. The biggest single variable in real estate underwriting for 2026 isn't price — it's next-decade insurance trajectory.
Kin's January 2026 Homeownership Trends Report (Pollfish survey, n=1,000 US homeowners): 93% are concerned about damage to their home in the next 2–3 years due to a changing climate. 49% say they may move because of climate risk. 31% are not confident they'll maintain adequate insurance through 2026. Average new home insurance premiums rose 8.5% in 2025 on top of an 18% jump in 2024 (Matic 2026 Predictions).
For investors, the insurance trajectory has moved from a background OpEx line to the dominant single underwriting variable. Florida average premiums are now ~4× the national average. Insurance now represents 10–20% of OpEx for many Florida properties, up from 3–6% historically. The California Association of Realtors reported 13% of CA realtors had at least one 2024 sale fall through due to insurance issues — nearly double the prior year.
The five questions to ask before you buy: (1) Is the property insurable today and in 10 years? Get quotes from three carriers, not one. If only the state insurer of last resort (Florida Citizens, California FAIR Plan) writes it, that's an insurability problem, not a coverage problem. (2) What's the premium trajectory? Model the next decade at +6–10%/year in higher-risk markets. (3) What's the physical exposure? Flood (FEMA + ClimateCheck), wildfire (Verisk, Wood Mackenzie), hurricane (NOAA storm surge), wind, hail. Don't trust a single source. (4) How will climate affect resale in 8–10 years? Buyers in 2034 will price insurance into offers more than today's buyers do. (5) Retrofit, relocate, or accept?
The state-backed insurer concentration risk deserves its own watch. California's FAIR Plan and Florida's Citizens are now de facto state insurers with single-event concentration that, in a bad season, could require state-level bailouts. A Cat-5 Florida hurricane with $150B+ insured losses could trigger Citizens insolvency and federal backstop pressure. The 2026 hurricane season starts June 1.