U.S. home insurance costs more in climate-prone areas, study finds.

By Andy Sullivan

WASHINGTON – Homeowners in areas prone to damage from hurricanes, wildfires and other climate-related disasters pay more for insurance than those living in more vulnerable areas, a U.S. Treasury study released Thursday.

The study found that homeowners living in the most vulnerable areas pay an average of $2,321 in annual premiums, which is 82 percent higher than those living in less vulnerable areas.

A study of more than 246 million homeowners’ insurance policies between 2018 and 2022 found that those who live in the riskiest areas are more likely to be dropped by their insurers.

Insurance costs have risen widely in the United States in recent years as the industry grapples with rising construction costs and rising climate risks associated with global warming. Climate change is fueling more intense and destructive hurricanes.

According to a Treasury Department study, average homeowner premiums will increase by 8.7 percent between 2018 and 2022 compared to inflation.

At least 25 people died and more than 12,000 homes were destroyed in the wildfires that swept through Los Angeles last week. Analysts estimate insurance losses of up to $45 billion and insurance premiums are expected to rise as a result of the disaster. Last fall, tornadoes devastated large areas of the southeastern United States.

Past disasters have thrown state insurance markets into turmoil, with Florida and Louisiana residents struggling to find affordable coverage.

(Reporting by Andy Sullivan; Editing by Chris Reese and Deepa Babington)