For generations, home insurance has been the safeguard that made the American dream of homeownership possible.
But in disaster-prone states like California and Florida, surging premiums, shrinking coverage, and fewer carrier options are forcing some families to question whether protecting their property is affordable – or even possible.
For high-net-worth (HNW) homeowners, the crisis is particularly acute, raising a troubling question: Is home insurance itself becoming a luxury product?
Charley Todd (pictured), founder of Charley Insurance, has built his agency around this very challenge. His firm specializes in covering high-value estates in markets where traditional insurers have retreated.
With premiums climbing and policies fragmenting, Todd said he is seeing more HNW homeowners considering self-insurance. “Ten years ago, people rarely questioned the value of home insurance,” he said. “Now, I hear more talk about skipping it altogether.”
Todd sees today’s volatility in the home insurance market stemming from one overarching factor: disasters are outpacing catastrophe risk models. “We’re seeing more disasters, more severe storms, and wildfires that exceed even expert predictions,” he told Insurance Business.
Because global reinsurance underpins the system, the impact of a disaster in one corner of the world reverberates everywhere – a global strain feeds directly into US markets already reeling from climate risks.
In Florida, hurricanes have driven carriers to insolvency or caused them to exit the market altogether. In California, wildfires threaten multi-million-dollar homes perched in the hills or along the coast. Some of the most desirable locations are also among the most disaster-prone.
“That correlation between dream locations and catastrophic exposure is why luxury owners are feeling this so sharply,” Todd said.
As mainstream insurers scale back or pull out, wealthy homeowners often find themselves stitching together coverage from multiple carriers, according to Todd.
A single estate might require separate policies for the main home, the guest house, a pool, fine art, jewelry, or even specialized roof coverage. “You can end up with three or four carriers just to fully insure one property,” he said.
The result is skyrocketing premiums, sometimes rivaling mortgage payments, and unpredictable gaps. In many cases, the last resort is a government-backed program, which may provide only partial protection.
Even when coverage is secured, gaps abound. Todd points to common oversights such as wine collections, fine jewelry, or custom pools that aren’t automatically covered under standard policies.
High-net-worth clients often need scheduled coverage for art or collectibles, extended replacement cost protection to rebuild at today’s soaring construction prices, and umbrella liability coverage for lifestyle risks that go far beyond the typical household.
“It’s not unusual for one insurer to cover part of a home but exclude certain roof types, while another steps in to cover the pool,” Todd said. “It’s piecemeal, and making sure nothing falls through the cracks is painstaking work.”
For agents, the challenge is compounded by regulatory constraints that limit what insurers can charge, even when risk levels clearly justify higher rates.
To navigate this shrinking landscape, some are turning to advanced analytics and artificial intelligence. Geospatial mapping, satellite data, and AI-driven risk assessments are allowing agents to make more granular cases for underwriters.
“Instead of relying solely on FEMA flood maps, we can show carriers whether a specific luxury home carries less risk than its zip code suggests,” Todd said.
This level of detail can help unlock capacity in markets where carriers have otherwise frozen new business. Todd believes agencies that embrace proactive, data-driven strategies will stand apart from traditional “reactive” firms.
“The future of home insurance for luxury clients lies in combining personal expertise with the best technology available,” he said.
For Todd, the crisis is both a business opportunity and a call to rebuild trust in the industry. His firm works with more than 40 carriers to provide high-net-worth families with tailored solutions and hands-on guidance. The goal is not just to sell policies but to help clients navigate an increasingly fragmented market.
“The beauty of insurance has always been that it lets people safely own assets they could never risk on their own,” Todd said. “The challenge now is ensuring that promise holds true—even as disasters get worse, costs rise, and trust in the system wavers.”
Could certain regions eventually become uninsurable? Todd doesn’t rule it out, though he remains cautiously optimistic. “Climate change is real, and losses are exceeding what we ever predicted,” he said.
Todd pointed to innovation, such as surplus lines, new tech-forward entrants, and private capital, as reasons to believe solutions will emerge, even if at a steep price.
“There’s always going to be someone willing to write coverage at some price,” he said. “But if that price makes ownership itself unsustainable, then we’ve crossed into dangerous territory.”
