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uxury homeowners with coastal views and beach access are facing a new reality: skyrocketing insurance premiums. Across the US, home insurance rates are rising sharply, but those in disaster-prone areas are seeing the biggest increases. For example, Citizens Financial Group reported that insurance premiums for mortgage loans over $1.5 million jumped 130% between mid-2020 and mid-2024.

    The "location, location, location" mantra is playing a significant role in this trend. Luxury homes often sit in coastal areas where natural disasters are becoming more frequent and intense. As a result, insurance companies are fleeing states like Florida and California or significantly reducing their presence. This leaves luxury homeowners with fewer and costlier insurance options.

    Homeowners are feeling the pinch, with one resident describing the rising costs as "totally insane." With self-insurance or no insurance at all being unfeasible for those who obtained a mortgage, luxury homeowners are facing a difficult situation. State Farm, California's largest home insurer, expects to cut 1 million policies by 2028, leaving more homeowners reliant on the state's last resort insurer, the FAIR Plan.