With climate change causing a spike in the frequency of natural disasters, homeowners in storm-prone areas are reconsidering property insurance coverage. Combine this with skyrocketing premiums, and it's easy to see why it calls for a property coverage update or adjustment.
As a U.S. Department of the Treasury report published in January 2025 found, homeowners in communities affected by significant weather events pay far more than homeowners elsewhere. Consumers whose zipcodes had the highest expected annual losses from climate perils paid up to 82% more.
By understanding your storm insurance options better, you can avoid overpaying while still ensuring your home remains protected with adequate coverage.
Is There a Difference Between Homeowners' Insurance and Property Insurance?
Yes.
Homeowners' insurance is a specific, specialized type of property insurance coverage. Property insurance, on the other hand, is an umbrella term for many types of coverage (aside from homeowners' insurance) designed as part of disaster risk management programs.
Homeowners' Insurance
Homeowners' insurance is explicitly for homes and homeowners. It provides coverage for:
- The residential building's structure
- The contents of the home (personal belongings)
- Liability for injuries to others
Homeowners' insurance usually protects against damages caused by specific perils like fire and theft. In many cases, it also covers windstorm, but carriers may exclude this for high-risk areas, such as coastal regions.
If you live in or near the Florida or Texas Gulf Coast, for instance, it's likely an exclusion on your homeowners' insurance policy, so it's best to get a windstorm insurance quote as soon as possible.
Property Insurance
Property insurance covers and protects many types of properties, including residential, commercial, and industrial. Examples include:
- Homeowners' insurance (for private residential dwellings)
- Commercial property insurance (such as business premises)
- Industrial property insurance (for industries like manufacturing and warehousing)
- Condo insurance (for condominium units)
- Flood insurance (for losses due to damage caused by flooding)
What Does a Property Insurance Policy Cover?
The exact losses covered depend on the specific type of property insurance. Typical homeowners' insurance policies, for instance, provide the following types of coverage:
- Dwelling/Coverage A: Covers the primary building itself (where you live, sleep, etc.) and attached structures, like an attached garage
- Other Structures/Coverage B: Covers structures detached from the primary building, such as fences, sheds, guest houses, and gazebos
- Personal Property/Coverage C: Covers your belongings or the contents of your home, like your clothes, electronics, and furniture
- Loss of Use/Coverage D: Also called "additional living expenses" (ALE); pays for temporary living arrangements and costs, like hotels and meals, if the home becomes uninhabitable due to a covered peril
- Personal Liability/Coverage E: Covers you against claims or lawsuits filed by others if you, your family, or your pets injure other people or damage their property
- Medical Payments to Others/Coverage F: Covers the medical expenses of guests who get injured while on your property
Commercial, industrial, and condo property insurance policies provide similar coverage for losses, although the exact things they cover differ. Commercial policies protect business premises and commercial buildings, while industrial policies cover manufacturing facilities, warehouses, and power plants.
Why Are Homeowners in Storm-Prone Areas Rethinking Property Insurance Coverage?
One of the primary reasons homeowners residing in storm-prone areas are rethinking property insurance is the increase in the frequency and severity of weather events. Another is the impact that these disasters have on insurance premiums.
Coverage Gaps as Weather Events Become More Frequent and Severe
Climate Central reports that extreme weather events, particularly billion-dollar disasters, are increasing in both frequency and intensity. The average count of billion-dollar disasters has increased from around three events per year during the 1980s to 20 over the last ten years (2016 to 2025).
In storm-prone regions, these dramatic weather shifts translate to more storms, heavier rains, and an increased likelihood of flooding. The drastically elevated risk that insurers now face has pushed them to:
- Charge higher premiums
- Restrict coverage
- Withdraw completely from the highest risk areas
Homeowners then either find themselves facing the added financial pressure of higher premiums, losing their coverage, or becoming underinsured.
Soaring Premiums That Influence Coverage-Related Decisions
As severe weather events impact property insurance coverage premiums, their increasing costs are becoming a central factor in how homeowners decide and deal with risk mitigation.
Some are reducing their policy's maximum insured sums. They do so to pay lower premiums. Unfortunately, while this allows them to stay insured, it also means they face a higher risk of becoming underinsured.
Others may even forego property insurance altogether. According to CBS News, a Realtor.com survey found that 60% of homeowners would do this if coverage gets too expensive.
Frequently Asked Questions
Does Property Insurance Cover Water Damage?
It does, provided the damage is "sudden" and "accidental."
Burst pipes and appliance failures often count as sudden and accidental, as long as the problem occurred due to something other than a homeowner's negligence. Negligence includes intentional lack of maintenance or deliberate delays in repairs.
Water damage from floods caused by natural events, however, isn't part of the package. Standard property insurance (like a homeowners' policy) won't cover this. You need to get separate flood coverage.
Are There Ways to Lower Property Insurance Coverage Costs?
Yes, there are several, starting with conducting an in-depth review of your policy.
When you review your policy, you can identify areas where you may be overpaying. An example is unnecessary coverage on belongings you no longer have. You may have fine art you've sold or valuable jewelry you've already gifted to a loved one.
Bundling policies is another way to lower your insurance expenses. Suppose you need several policies (e.g., homeowners', auto, and commercial insurance). If so, you may be able to get all of them at a discounted rate from a single provider.
Reduce Risks With Adequate Property Insurance Coverage
Homeowners in storm-prone areas should recognize that severe weather events are likely to become more common and intense. As a result, traditional property insurance coverage may no longer suffice.
All that should prompt you to conduct a comprehensive insurance policy review today. It can help you determine if you need increased home protection strategies (such as flood or windstorm) and identify areas where you can lower your costs and save while staying insured.
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This article was prepared by an independent contributor and helps us continue to deliver quality news and information.