Finance guru Suze Orman says climate change will stop Americans wanting to own homes as it is causing insurance costs to soar – as she faces $28,000 A YEAR premium for modest Florida condo

Financial guru Suze Orman has warned that climate change’s effect on rising property insurance premiums is destroying the American dream of home ownership.

The 72-year-old has given up coverage on her own 2,100-square-foot oceanfront condo in Florida after her insurer quoted $28,000 a year.

Orman argues that Americans will soon have little interest in owning homes because insurance costs make them too untenable to maintain. This in turn could lead to a drop in real estate prices.

Last year, the U.S. suffered 28 natural disasters that cost at least $1 billion each, according to the National Oceanic and Atmospheric Administration.

As a result, the national average price of home insurance increased 23 percent to $1,759 per year between January 2023 and 2024, according to Bankrate figures.

The amount paid out by insurance companies to cover damage caused by extreme weather events, such as wildfires and hurricanes, has increased steadily since 2000

A view shows a house burning as the Fairview Fire near Hemet, California, US, September 5, 2022. Wildfires have driven up costs for insurers – who have increased premiums

Orman told DailyMail.com: ‘Climate change is going to make a big difference in people’s desire to own their own home.

“Look what’s happening in Southern California. Look at the devastating hurricanes that are coming to places where hurricanes were not so common before. I think people are getting a little confused, especially with mortgage interest rates still at the same level.”

She added: “Real estate is unpredictable. I never thought about advising home buyers “oh, you better make sure you can afford to quadruple your title insurance in the future.”

In the US, buyers cannot take out a mortgage without also purchasing home insurance.

But Orman owns her Florida condo outright, meaning she could give up the cover.

She said: ‘I’m not paying $28,000 a year and the insurer will probably dispute any claim I get anyway. Luckily I have the money to insure myself.

“$28,000 for a 2,100-square-foot apartment. Are you joking?’

Marta Cross had to pay more than $4,000 a year for home insurance in Los Angeles

Extreme weather events – such as hurricanes, floods and tornadoes – have become increasingly common in the US. US Census Bureau data shows that such events have forced an estimated 2.5 million people from their homes.

Higher construction costs have also made repairs more expensive, driving up insurance premiums.

And some insurers are withdrawing from disaster-prone areas altogether.

Last year, State Farm, America’s largest home and auto insurance company, announced it would no longer insure homes in California because the risk of wildfires was too great and the cost of rebuilding too high.

According to S&P GlobalState Farm reported an 84 percent loss rate in the first nine months of 2023, up over 20 percent from 2022.

Insurers pulling out of California affected actress Marta Cross and her musical boyfriend, who faced big home insurance bills last summer when they bought a house in LA.

The purchase almost fell apart when she couldn’t get coverage from any of the private sector companies. WWith no private insurer willing to provide coverage, she had to turn to the state insurer of last resort. It all came to $4,000.

Jewell Baggett, 51, sits in a bathtub amid the rubble of her home in Horseshoe Beach, Florida, which was reduced to rubble by Hurricane Idalia in August. Severe weather conditions have affected insurance premiums

Orman owns her Florida condo outright, meaning she could give up the cover

A recent investigation from Bankrate exposed America’s home insurance lottery, which means residents of some states have to pay twice as much as those of others.

The findings showed that homeowners in Nebraska, Oklahoma and Kansas faced the highest bills, while Louisiana suffered the fastest rising premiums.

Louisiana has been hit by hurricanes, severe storms and flooding in recent years.

According to Bankrate, Americans can reduce the cost of their home insurance by bundling their auto and home policies and understanding the different types of home coverage and finding the right one.

Improving your credit score can also help, and it may be worth it to simply ask your provider for a discount, for example if you have a new home security system installed.

Another option is to increase your home insurance deductible, but experts warn there are risks with this method.

Your deductible is the amount of the claim you are willing to pay out of pocket. Most homeowners insurance policies have a deductible of at least $1,000.

The higher your deductible, the lower your premium, but the more you’ll pay out of pocket when you make a claim.

Deductibles have become a very big problem,” Charles Nyce, associate professor of risk management and insurance at Florida State University’s College of Business, told DailyMail.com.

“But it is dangerous, there will be people who suffer losses they cannot afford.”