The Full Cost of Hurricane Season

How Climate Change and the Insurance Crisis Reshape Gulf Coast Communities

By Brya Arcement

Good morning, Reader. Do you or someone you know own a home on or near the Gulf Coast? If not, that’s okay, but pretend that you do. 

So, imagine this, you’re standing in your kitchen, opening a letter from your insurance company. The three-bedroom home where you raised your children, where your grandchildren visit every summer, has been in your family for over thirty years. Your neighbors feel like extended family, with annual block parties, barbecues, sports games, the same faces at church every Sunday morning. 

But the number on that letter might end all of that; $14,000 a year. Five years ago, you might have paid $9,000. Even with a solid pension and retirement income, a 50% increase is simply unsustainable. 

Unfortunately, this story isn’t hypothetical for millions of Gulf Coast residents. From Texas to Florida, a quiet crisis is unfolding, one that is already reshaping communities and displacing longtime residents. While the physical threat of hurricanes is at the heart of this story, it’s the role of a relatively small set of companies in accelerating and responding to these disasters that may prove to be the more lasting storm.   

When Your Home Becomes Unaffordable 

The numbers are, frankly, shocking. Between 2021 and 2023, home insurance costs jumped 20% across the country. But for Gulf Coast residents? It’s much worse. In Fort Myers Beach, Florida, annual premiums jumped from about $9,000 to almost $14,000 from 2019 to 2024, a 56% increase in just five years. 

What makes it even harder is insurance companies changing the rules. Deductibles used to be simple, maybe $1,000 or $2,000. Still a lot, but more attainable. Now? They’re based on a percentage of what your home is worth, usually 2% to 5%. Small changes to the deductible present a major (often surprising) barrier to recovery after disaster. For a 2%–5% deductible on a $350,000 home, you’ll pay between $7,000 and $17,500 before insurance covers anything after a hurricane. And that’s on top of a $14,000 yearly premium. (Insert obligatory Cajun ‘ooooweee” here, because WHAT?)

Reader, think about that for a second. Many families are now possibly spending hundreds, if not thousands, of what they make each year JUST on insurance, BEFORE the deductible even kicks in. They’re forced to make impossible choices: dip into retirement (in this economy?), put off going to the doctor (IN THIS ECONOMY?), cut off their kids’ extracurriculars (the kids need social skills, goodness), or take a HUGE gamble and go without coverage (IN THIS – you know what, you get the point). Going without insurance is not an option for most people. 

Insurance is SUPPOSED to give assurance, but the only assurance you’re getting is that the money you do manage to squirrel away might not be there when you or your neighbors need it. The thought of losing everything in one storm is absolutely terrifying. For communities worried about when the next storm will hit, paying these premiums can feel like drowning in slow motion. 

Beyond the bills and policy papers are people, families, whose homes aren’t just buildings; they’re where family history lives, where they feel connected to a place, where they’ll always belong. Think about the doorframe or the wall with pencil marks showing how tall kids have grown. Or the large oak tree planted when a grandchild is born (I can attest to this!). How do you price that? How do you tell your grandbabies that the house they’re used to making fun and loving memories at is no longer a place they can visit? And not because of the destruction of a storm, but because you can’t afford the insurance? 

When Insurers Walk Away

Homeowners in coastal areas are caught between a rock and a hard place. Climate change threatens to bring increasingly fierce, unpredictable weather one minute. Insurance companies squeeze every cent out of an already uneasy situation the next. 

At the end of 2024, after years of pressure from groups like Public Citizen, the Treasury Department released the biggest public dataset on insurance in history. It showed that communities facing a high risk of natural disasters also face higher “nonrenewals” (basically, a more sanitized term for being dropped from coverage). The data confirmed what many suspected. Since the data only goes up through 2022, these trends are likely getting much worse. The reality is that insurance companies are abandoning communities faster than the government can even collect data on them. 

The behavior of companies like Farmers, Progressive, and AAA is telling. These big name companies have packed up and left, exiting Florida completely or cutting way back on how many policies they’ll offer in the Gulf Coast states. Insurance companies buy their own insurance (called reinsurance) to protect themselves from huge losses. After years of multi-billion dollar hurricane seasons, the companies that insure insurance companies are charging more and covering less. Reinsurance companies are raising costs, and primary insurance companies, one like Farmers, pass those costs down to regular folks like you and me. 

The companies that have stayed behind or popped up aren’t a solid guarantee either. In Florida alone, 11 home insurance companies went bankrupt over two years. More than eight home insurers in Louisiana went broke in 2022. Every time an insurance company falls, it creates chaos; policies get canceled, homeowners panic trying to find new coverage, and the other insurers still in business try to raise their prices because they know customers are desperate and have nowhere else to go.

When large and small insurers alike aren’t an option, more people fall on last-resort options. In Texas, many coastal residents have ended up with the Texas Windstorm Insurance Association, a state run backup plan where homeowners typically pay $2,300 a year. These state-affiliated programs were meant, at best, to be a last resort, not a main option. The fact that so many people depend on them now shows just how badly the regular insurance market has broken down. 

Without Insurance, Communities Fray 

The insurance crisis doesn’t just hurt individual homeowners; it’s tearing apart entire communities. When insurance gets too expensive or hard to find, home values start dropping. It’s frustrating. Your home might be in great shape, but it’s worth less because buyers can’t afford to insure it. 

And even if people want to sell their home, the question is . . . sell to who? Without affordable insurance, the real estate market in coastal areas can end up stuck. Sellers may not be able to find buyers willing to take on insurance costs that rival a mortgage payment. Young families, already stretched thin, can’t make it work financially. Older longtime residents can’t sell, can’t afford to stay, and often can’t bear to leave the only home they’ve probably known. 

Once insurance becomes unaffordable, it can start to unravel a whole community. Schools lose students. Small businesses that count on year-round locals (not just tourists) watch their customers disappear. In some areas, high-end condo developers might move in, but teachers, home health aids, grocery store workers, restaurant staff—working class folks—get priced out of towns where they live and work, forcing brutal commutes or a job or career change (in. this. economy). 

Communities can fray in quieter ways too, creating losses that are hard to quantify but crucial. When neighbors move because they can’t afford insurance, you lose the networks that make living on the coast work. It means fewer folks to check on elderly neighbors during evacuations. Fewer hands to help board up windows before a storm. Fewer folks around for cleanup after a disaster. The sense of community that once made a place special just . . . disappears. 

Is Bluelining the New Redlining? 

There’s a name for this trend, and it’s called bluelining. Coined by Tulane professor Jesse Keenan, the term originally referred to the practice of drawing lines around areas deemed as high disaster risk and withholding insurance or loans.

Does that sound familiar, reader? It should. Bluelining echoes the discriminatory practices of redlining, where banks refused to lend in certain neighborhoods, typically those with predominantly Black and brown residents. Today, early patterns of bluelining overlap with the same areas that were historically redlined. As insurance companies factor climate risk into their business and disaster models, low income communities and communities of color get the short end of the stick again. They face a new wave of financial exclusion that mirrors the discriminatory practices of the past (yall ain’t tired?!). 

The insurance industry played an early leading role in shaping redlining; the industry shouldn’t get much credit now for simply changing the color of the pen. While bluelining isn’t technically illegal, it disproportionately impacts minority and low-income residents. Why? These residents often live in more climate-vulnerable areas and have fewer resources to absorb the costs. I mean, redlining and bluelining are practically twins. 

It’s Time to Confront the Elephant in the Room

Yes, behind all of this is climate change (but who set that system up? lbvs). Hurricanes are strengthening faster and staying on land longer, causing more damage. Flooding is reaching areas that were once considered safe, moving faster than the government can even map it. And the insurance companies that were supposed to provide the safety net are responding to these new realities by retreating from risk. 

The industry isn’t shy when it comes to acknowledging climate change when it serves them. They’re using sophisticated computers to predict future losses and pricing for their policies (or refusing to offer them). This creates a bitter irony; the communities most vulnerable to climate change are being abandoned by the very industry that’s supposed to help them protect themselves from financial ruin. 

Meanwhile, too many political leaders in the Gulf South are sticking their heads in the sand, refusing to acknowledge the root cause of this crisis. So the fossil fuel companies that contribute most to climate change face few consequences. Without intervention, homeowners will bear the full weight of rising seas and strengthening storms. 

This crisis isn’t just about premiums and policies. This is about whether we will let entire communities be destroyed, not by hurricanes, but by an industry that prioritizes its bottom line over human lives and livelihoods. These aren’t just Gulf Coast problems; they’re a warning about what’s in store for the rest of the country. And they demand solutions, before more families are forced to choose between their homes and financial survival.