The Homeowners' Insurance Crisis Hits High-Net-Worth Clients, Too

High-net-worth clients may have primary residences or vacation homes on the beach in places like Florida or California.

Hurricanes and wildfires in those areas are becoming more frequent and more severe.

Florida's population has been surging, thanks to the new remote work opportunities and an appealing tax environment.

But, over the past five years, insurance premiums in Florida have increased as much as 400%. Many carriers are reducing the amount of coverage they sell in high-risk areas. Some have left the market altogether.

In California, over the period from 2020 through 2022, insurers declined to renew nearly 3 million homeowners' policies.

About 500,000 of the policies that were dropped were in Los Angeles County. In January, the county faced the most destructive fires in its history.

Some high-value coastal properties in Florida and California are now virtually uninsurable: 69% of the respondents to HUB's 2025 Outlook High-Net-Worth Survey said they had experienced trouble with buying enough property insurance in the past year.

For clients selling their coastal properties, the challenges are manifold.

Demand has dwindled due to high carrying costs and the perceived risks of owning property in disaster-prone areas.

While home prices have doubled since 2017, prices have plateaued since early 2023, with analysts predicting potential price corrections. Affluent families must navigate this uncertain landscape carefully, balancing the financial risks of property ownership with their broader wealth management goals.

What Wealth and Estate Planners Can Do

You may not be a property insurance expert, but you can start conversations about risk-management strategies.

Self-insurance: Affluent families are making more use of self-insurance, by raising their deductibles, dropping riders or even forgoing coverage altogether.

While these strategies can reduce premiums, they introduce significant financial risks.

Advisors must work closely with clients to assess the financial implications of higher deductibles and out-of-pocket expenses.

Non-financial risk management: Encourage clients to invest in risk mitigation measures, such as installing hurricane-resistant windows, updating cybersecurity systems and safeguarding valuable assets like art and jewelry

Discuss diversifying property holdings to include assets in lower-risk areas.

Entities: Talk to clients about establishing trusts, family limited liability companies or other entities to manage properties more effectively and minimize tax liabilities.

Alternative risk transfer solutions: Make sure clients know something about arrangements such as captives and excess and surplus coverage.

Traditional insurance: Educate clients about the value of sticking with traditional insurance, if it's available, even if the premiums rise. Highlight the intangible benefits of insurance coverage, such as access to recovery resources and disaster warnings, which self-insurance does not provide.

Communications: Try to get everyone thinking and talking about these issues. Help older clients educate younger family members about the importance of risk mitigation and financial planning.

Host discussions with insurance brokers and other risk advisors to ensure families understand their exposures and options.

Katherine Frattarola is head of HUB Private Client.