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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 72 July 2025 J O U R N A L which indicates that consumers faced decreasing availability. While some California counties have some of the highest nonrenewal rates, residents living along the Carolina and Louisiana coasts, in southern Flor- ida, and in Oklahoma were affected in 2023, according to a U.S. Senate Budget Committee's findings of home insurance nonrenewal rates. "Insurance markets are leading indicators of how financial systems will respond to climate change," said Max Dugan-Knight, Deep Sky Climate Data Scientist. Insurers Facing Mounting Operational Costs Insurers' costs in 2018-2022 were higher in areas with the highest expected losses from climate-related perils. The paid loss ratio, which reflects how much insurers paid for claims relative to what they received in premiums, was highest in the highest risk ZIP codes. These areas had a higher frequency of claims and se- verity of claims, about $24,000 on average compared to an average of about $19,000 for lowest-risk areas. Homeowners in high-risk areas of flooding or storm surges, for example in Florida, have found they are unable to get policies. Many home insurance companies in Florida have been forced to pull back altogether, leave the state, or even go out of business. Some insurance companies that have left Florida or have reduced their exposure in the area include Farmers, Progressive, and AAA. "When insurers can no longer price risk effectively, they exit the market en- tirely. This creates a cascade effect that will ultimately impact property values, mortgage availability, and regional eco- nomic stability," said Dugan-Knight. Tariff Impact on Storm Preparedness As the hurricane season gets under- way, the recent tariffs imposed by Presi- dent Trump may play a more significant role as mounting tariff prices are sure to hit the wallets of Americans getting storm-ready. Items such as plywood, nails, and generators may see significant price hikes, with costs ultimately falling upon consumers. "Homeowners may not realize that tariffs can impact the cost of basic hurricane prep—things like plywood, roofing nails, and even generators," added Bankrate's Martin. "Aside from the 10% baseline tariffs currently in place, most of the Trump-era tariffs are temporarily suspended until mid-July, so there is a narrow window where prices might hold steady. But if the higher tariffs roll out in the middle of hurricane season, Ameri- cans could face price spikes and shortages for critical mitigation supplies when they need them most. If you haven't bought what you need to make it through hurri- cane season yet, now is the time." Will FEMA be Ready to Answer the Call? And as President Trump's adminis- tration looks to cut back many govern- mental agencies, the Federal Emergency Management Agency (FEMA) remains in the line of fire, with cuts threatened to both FEMA's budget and staff. President Trump told victims of the Hurricane Helene-related disaster in North Carolina after his January inau- guration that residents needed "a good state government" rather than FEMA. In remarks at a recent House Rules Committee hearing, Rep. Jared Mos- kowitz of Florida echoed his concerns that FEMA may not be ready if disaster strikes. Rep. Moskowitz said budget cuts by the Department of Government Efficiency (DOGE) have made FEMA inefficient, and these cuts may risk sending hurricane-prone states into bankruptcy if they are denied federal aid when a storm strikes. World Weather Attribution reports that climate change made Helene's winds some 11% more intense and its rains 10% heavier. Helene strengthened from a Category 2 to a Category 4 hurricane in just 10 hours, driven by warmer-than-usual ocean temperatures in the Gulf of Mexico. "Remember that 'DOGE?' Remem- ber the 'E' at the end of DOGE? The word 'Efficiency?'" Moskowitz asked. "Nothing at FEMA has been made more efficient. In fact, I would tell you that the secretary of Homeland Security has turned FEMA into the Newark Airport, OK? It is going to fail this summer." CNN found that FEMA, which em- ploys more than 20,000, has lost roughly 30% of its full-time staff to layoffs and DOGE buyouts. HOUSING COSTS MOUNT AS HOMEOWNERS FACE 'HIDDEN EXPENSES' A ccording to Bankrate's recent Hidden Costs of Homeowner- ship Study, the average yearly expenses for owning and maintaining a typical single-family home in the U.S. in 2025 will be $21,400. Bankrate refers to them as "hidden" since homeowners frequently fail to consider or anticipate them, particularly when they are cre- ating a budget for a property purchase. However, these recurring costs serve as a reminder that homeownership entails far more costs than just the initial purchase price and monthly mortgage payments. For many Americans, purchasing a home is the largest expense they'll make and the biggest financial decision they will ever experience. However, many first-time homeowners are still shocked to discover that, after they have the keys, housing expenses often still or continu- ously arise—building up to a substan- tial, often stressful amount. "For most folks, buying a home is the most expensive transaction of their lifetime," said Mark Hamrick, Senior Economic analyst at Bankrate. "After the purchase is complete, we find that affordability issues rank high on the list of regrets. While homeownership is still associated with the proverbial American dream, it is prudent to consider and plan for the many ongoing costs of ownership, not just getting over the threshold of the

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