In 2020, insuring a modest home in Fort Lauderdale might have cost $2,400 a year. By early 2026, according to Insurance Information Institute data and broker estimates across South Florida, that same coverage can run north of $6,000, assuming a carrier is willing to write the policy at all. Across Florida, California, Louisiana, and a growing list of disaster-prone states, insurance has gone from a forgettable line item to the single biggest wildcard in household budgets.
Mark Cuban saw it coming. In a December 2024 interview with CNBC, the billionaire entrepreneur called escalating insurance costs “the No. 1 housing affordability issue” facing the country, warning that Florida in particular would face “huge problems” within a few years. More than a year later, the data behind that prediction has only stacked higher.
Federal data confirms the squeeze
The most thorough federal look at the problem comes from the U.S. Treasury’s Federal Insurance Office, which examined the period from 2018 through 2022 and found that homeowners insurance costs rose sharply while availability shrank. ZIP codes facing the highest expected annual losses from climate-related disasters carried materially higher premiums than lower-risk areas. At the same time, insurers tightened underwriting and pulled capacity from the very markets where coverage was most needed.
Since that report’s data window closed, the pattern has intensified. In California, the nation’s largest homeowners insurance market, State Farm secured approval for a roughly 17 percent rate increase on homeowners premiums, citing mounting wildfire exposure. California Insurance Commissioner Ricardo Lara approved the emergency request in part to keep the carrier from dropping policyholders outright. Even with the hike, insurer pullbacks have left homeowners in fire-prone regions scrambling for private options.
Florida’s situation may be worse. The state’s average homeowners premium already ranks among the highest in the nation, driven by hurricane exposure, litigation costs, and a string of carrier insolvencies over the past several years. Legislative reforms passed in late 2022 aimed to stabilize the market by curbing one-way attorney fee arrangements and attracting new capital, but premiums have continued climbing for many policyholders. Citizens Property Insurance, the state-backed insurer of last resort and the largest residual-market carrier in the country, still holds a massive policy count, a clear signal that the private market has not fully recovered.
The affordability math is changing fast
Insurance is not optional for virtually any mortgaged home. Fannie Mae and Freddie Mac both require borrowers to maintain hazard coverage as a condition of their loans. When premiums jump by hundreds or thousands of dollars a year, the increase lands squarely on a household’s monthly payment. For buyers already stretched by high home prices and elevated mortgage rates, that added cost can push them out of qualification range. For existing owners, it forces hard tradeoffs.
Reporting from The Washington Post documented a growing number of homeowners losing coverage in areas repeatedly hit by climate disasters. When carriers exit or refuse to renew, owners often land on state-backed plans that charge higher rates and offer thinner protection. Some go without coverage entirely, a gamble that can jeopardize their mortgage standing and leave families exposed to catastrophic loss with no safety net.
Cuban’s argument reframes insurance not as a peripheral expense but as a gatekeeper to homeownership itself. In markets where wages and home prices are already mismatched, a premium spike of even a few hundred dollars a year can be the difference between keeping a mortgage current and falling behind.
The trillion-dollar question
Putting a precise dollar figure on the long-term fallout is harder. Research by First Street Foundation, a private climate-risk analytics firm, estimated that climate change could erase roughly $1.5 trillion in U.S. housing value as risk gets priced into insurance and mortgage costs, as reported by CNBC in February 2025. The mechanism is intuitive: higher premiums and tighter coverage make exposed properties less attractive to buyers, dragging down demand and, eventually, prices.
That projection carries real caveats, though. First Street’s modeling assumptions, including the emissions pathway used, the time horizon, and how it accounts for local adaptation measures like improved fire management or upgraded flood infrastructure, have not been fully detailed in public reporting. Several housing economists have cautioned that trillion-dollar estimates work better as directional signals than as precise forecasts. Migration patterns, regional economic shifts, and future policy decisions could all bend the curve.
Cuban himself has not laid out a detailed policy agenda. His public comments have zeroed in on the scale and urgency of the threat rather than specific reforms to insurance regulation, building codes, or federal disaster programs like the National Flood Insurance Program, which itself faces recurring reauthorization battles in Congress. That leaves open questions about how much of the burden will ultimately fall on individual homeowners and how much might be absorbed through public policy, reinsurance markets, or infrastructure spending.
The ground is already shifting
Whether or not the eventual losses reach the trillion-dollar range, the combination of rising premiums, shrinking carrier availability, and intensifying climate risk is already reshaping where Americans choose to buy homes. Coastal metros and fire-prone suburbs that once commanded top-dollar prices are starting to see buyers weigh the true cost of living there: not just the mortgage payment, but the insurance bill, the flood zone designation, and the question of whether a carrier will still be around next year.
As of spring 2026, Cuban’s timeline still has room to run. But the trends he flagged in late 2024 have not reversed. Each wildfire season, each hurricane landfall, and each round of nonrenewal letters pushes the insurance crisis closer to the center of the national housing debate. For millions of homeowners, the question is no longer whether costs will keep rising. It is how much more they can absorb before something breaks.
