Trading Secrets - 320. Chloe Demrovsky on the Home Insurance Crisis: Rising Premiums, Hidden Risks & What Homeowners Need to Know

Episode Date: August 3, 2026

Home insurance costs are skyrocketing—and it's affecting far more than just homeowners in high-risk states. This week on Trading Secrets, Jason Tartick sits down with risk and resilience expert Chloe Demrovsky to unpack the real reasons insurance premiums are surging, why coverage is disappearing in certain markets, and what every current or future homeowner needs to know before it's too late. From climate risk and billion-dollar disasters to hidden policy exclusions and the true cost of rebuilding after catastrophe, Chloe breaks down the insurance industry in a way that's practical, easy to understand, and immediately actionable. In this episode, you'll learn: • Why home insurance premiums have increased faster than inflation • The biggest coverage gaps most homeowners don't discover until after disaster strikes • The difference between replacement cost and actual cash value • Why flood insurance, alternate living expenses, and policy exclusions matter • How AI can help you understand your insurance policy • The simple steps every homeowner should take today to protect their finances and family • Why your insurance premium is actually a warning signal—not just another bill Whether you're buying your first home, own multiple properties, or simply want to protect your biggest investment, this conversation could save you thousands—and help you avoid costly mistakes when it matters most. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Do you ever go to the doctor looking for more answers, but then you just get that general advice? Well, I have an answer for you in a solution. It is called superpower. Here's what they're doing. It's one simple blood drop that gives you information on over 100 of your blood biomarkers. Your annual physical checks usually give you about 10 to 15 for comparison. The testing gives you a much deeper understanding of your body across 17 core systems. When you have this kind of information about your body, you have more control over your health. from disease prevention to finally fixing that annoying brain fog. Superpower makes health easy. They send a licensed professional to your home or you can visit a nearby lab.

They'll help with supplement recommendations. You can get your actual biological age and it'll integrate into past medical history. It doesn't just give you a snapshot either. It tracks your results over a lifetime. And for me, this is what it's all about. getting insights into over a hundred plus of my biomarkers like control iron cortisol levels etc take control your health with superpower for a limited time our listeners get $20 off to unlock their new health intelligence just head over to superpower dot com and use code trading secrets for

$20 off your $199 superpower membership and after you sign up they'll ask how you heard about superpower tell them trading secrets sent you to support the show another episode of Trading Secrets. Today, I am joined by someone whose entire career has been dedicated to one question. What happens when things go wrong? And are you financially ready for it? I'm sure there are many more questions than that, but that's a big one we're going to talk about. Chloe Demrovsky is a risk-in-resilience expert, the founder of Edgewood Insights, a professor at NYU, a senior Forbes contributor and the former president and CEO of Disaster Recovery Institute International, the global organization responsible for credentialing tens of thousands

of professionals in over 100 countries who help businesses and communities prepare for and recover from disasters. She's briefed Congress. She's presented at the United Nations. She's been on every major network. And today she's on trading secrets to talk about something that directly affects every single person listening to this show right now who owns and who wants to own a home. Home insurance. Specifically, why are your bills going up? Why may coverage not be available where you think it is? What can you actually do about it right now? This is a complicated insurance market conversation, one that impacts everyone.

It's relatable. It's necessary. Money, risk, and really what it costs to own your home when you put everything on the line. Chloe, welcome to trading secrets. Thank you so much, Jason. Happy to be here. This is a very, very important topic that we're covering today. One that impacts so many of millions nationally and international.

And also is having such an impact on politics, on decision making, on policy. I mean, even one thing we do in this podcast, we talk pop culture, you got a guy like Spencer Pratt from reality TV, making it his foundation running for mayor. So it impacts literally everything. But before we get into those conversations, and if you are a homeowner or want to be one or no one, trust me, you're going to want to stay tuned because a lot of this is consumer focused, what you need to know when you are dealing with home insurance and the questions you could ask and things you should be aware of. But before we get into that, you've spent your career

at this intersection of disaster, recovery, financial risk, advisement, now a professor, so all different areas, briefing Congress. My question is, what was the driver of this passion, why this area of work? I've always been mission driven. I get out of bed, like wanting to help people, and I think really big picture. So why are our systems not serving people and how can we make people's lives better? That's what I think about. If it were just money, I'd be thrilled, but unfortunately, I have a purpose in life. I have a mission. So that's what really gets me out of bed. And, you know, I'm from New York City. Obviously, we had 9-11 that shaped everybody's lives, and then we had this like 2003 blackout. And I was on my way into the subway, you know,

when the blackout happened. And then so all of those kinds of disasters sort of shaped my early childhood. We had the financial crisis that, you know, really shaped my early career. And so I saw how these kinds of like big systemic things can kind of come out of nowhere. And so we can't control those, but we can control people's individual preparation for and reaction to these problems. And that's where I can actually make a difference. It's amazing. Real quick, you just said you were on the subway during 9-11 and it blacked out. I'm so lucky I was not on the train. I was on the platform. Oh, my gosh. And everything just went dark.

Oh, my gosh. Right. It was really scary. And so then I remember running out and this woman being like, there's rats down there. There's rats. We all ran out of the subway. It was crazy. Wow. Analyzing climate economics, disaster risk, and just disaster relief, just I'm curious from your perspective when you do jump into 9-11 since you mentioned it. What was one of your biggest takeaways and learning lessons in those areas? Yeah. So personal preparedness is a big thing about this, right? We don't take the time to talk to our families about like, what are you going to do in the event of some sort of. sort of community-wide crisis, and it can just come out of nowhere. I mean, 9-11 was a brilliant blue sky. It was a gorgeous September day, right?

So it came out of nowhere, and a lot of these things do. The earthquake in Venezuela, earthquakes in general, like they just come out of nowhere. They're not like hurricanes where, like, we sort of have a little bit of preparation. Yeah. Wildfire, same thing. So, like, if you spend a little bit of time when the sun is shining and it's a beautiful day, thinking about how you're going to protect yourself and your family and, you know, any assets that you have in those sunny times.

you can do a lot better during the stormy days. That makes sense. I don't know why as you're pontificating on this, the first thing that came to my mind is I recently just read about the Titanic. And there was like, I know it doesn't really connect to this, but there was an actual wild connection to the weather and them hitting the iceberg.

And that night, it was an absolutely beautiful night. It was clear skies, but no moonlight. And usually you can detect icebergs from waves crashing into the icebergs, and it was completely flat. And because of that, they didn't see it until last minute. It's funny how these, it's not funny. It's ironic, though, that some of these perfect days can be some of the worst days that

will always remember and talk about. Before I keep going with this conversation, I don't think, man, there are almost 400 episodes, this idea of having a mission when you wake up. I actually somehow don't think we've ever addressed that. And I think it's a really cool topic. So break that down for me. When you wake up and you are tired and you are exhausted and you got to go teach and you got to go do live TV, you got to come do a podcast.

What actually is your mission when you wake up? What is that thing that drives you? Yeah. So, I mean, I've thought a lot about this. Obviously, it's deeply personal. And I really want to leave the world more resilient, more sustainable, and more beautiful for my kids. Yeah.

Okay. I love it. I love it. Well, I want everyone to think about it right now. What is your mission when you wake up? I think that's a good takeaway. Give us five stars and throw that in the comments. But my question on the home insurance front, which is obviously a component we need to talk about

today, there's been massive shifts in like all areas, like an inflation or right now it's over 4%. Just the cost of build a home is so significantly higher than it was five, 10, 15 years ago. And there's been a huge change in premiums in health insurance and home insurance. My question to you, though, is when did you start to recognize there's been a massive shift within this space that you wanted to take your work and bring it to the forefront of what you do? Yeah, so I mentioned some of those early kind of man-made disasters. But then I was in New York City during Hurricane Sandy. And so this is where we saw a hurricane really hit the eastern seaboard and sort of those major corridors, economic corridors, and that had a huge, huge impact. And I saw it affect my community.

I saw it affect normal, everyday people. And so in New York City, you know, maybe the financial center was protected. They had good business continuity plans. They were sandbagged. But some of the, you know, the more coastal areas, that's where like the middle class lives, the working classes of New York, a lot of the first responders, actually, the police, the firefighters, their homes are in sort of these low-lying coastal areas. And so seeing them get hit by the storm and then maybe not necessarily having the insurance coverage that they thought they did because who reads their policy? Yeah. If we're being honest, right? Like, it's something that you have to get.

Yeah, exactly. And just think about like right now when you look at the percentage of people that have their net worth in their homes. And just like that snap at the moment, it's gone. Yeah. It's significant. Okay, so let's get into insurance premium. So this is according to CNBC. Insurance premiums jump by $648 to 24% to $3,303 per year between 2021 and 2024.

That's just looking at that time frame. We have seen how prices have increased, risk has increased, and premiums have increased from 2024 to 2026. It's significant, and I know that the people listening right here are feeling it. Insurance in general, let's just take a step back. We want to talk about how did we get here. insurance in general is all built on the business model, right, of you pay a premium, we analyze the risk, and we insure no matter what happens, that the insurance company will be profitable based on what we cover. Yeah. That's kind of the business model, right?

Can you break that down? And also, how did we get here and why? Sure. So insurance is built for the possibility of disaster, not the certainty of it. And so it's built with the idea in mind that maybe one house will burn down. or there will be a car crash or, you know, in the old days, right, the ship will go down. Not all of them at once, not the entire community at once. And that's why these sorts of big disasters, these community-wide events, are so difficult for the

insurance communities to recover from because it's everybody calling out their policy at the same time. And so when that happens, when you have something like in 2023, there was basically an $80 billion loss year for insurance companies here in the U.S. That's huge, right? And so they take a few years to recover. from something like that. It's not automatic. And that's where you see, like, the premiums go up for everybody.

We've seen premiums go up 74% since 2008. That's 40% faster than the rate of inflation. And I don't know about you, but I've been feeling inflation, you know? Big time. Yeah. So if you think about the price of eggs, it's much worse in insurance, and it's only going to get worse from here. I mean, I will just be honest, in all forms of insurance, I'm just going to be real. It irritates the hell happy.

Yeah, yeah, totally. Of course. Life insurance, health insurance, home insurance. You need it there for the catastrophic event. And that's why it's there to let you sleep easy at night. And what we're seeing, though, is in many of these cases. Catastrophic events happen, and it's not there. If you had to put a blanket statement on the why, what is the why in which consumers

are having issues with insurance when these disasters occur? So think about what it is to buy a home. Here it's about wealth building, right? You are buying a home. It's usually the largest check you write in your life. life, it's the largest asset you hold. It's really, really valuable and important. 92% of people who buy a first-time home are using a mortgage to do that. And the bank, because it's really their asset until you pay it off, the bank says you have to

have homeowners insurance. So that's what actually drives the buying decision for people for insurance. It's not like they're like, hmm, this is what I feel like spending my money on, right? It's a, you know, a $2,500 to $3,000 a year that you would rather maybe spend on something else. bank is making you do it. So you shop around and often people just buy kind of the cheapest plan that they can without really actually reading what's covered until the day that they need it. And then there's also so many layers in the fact that banks are acquiring insurance firms. So banks will mandate that you have insurance firms and then you have to use their insurance. Their profit really goes up and then they have control over that pricing.

I mean, it almost feels like I don't want to use the word monopoly, but it does. feel like they have a very competitive advantage over the consumer? Sure, yeah. Well, they're, I mean, they're big institutional actors. They tend to be different entities. But yes, insurance companies are financial institutions at the end of the day. But at the same time, if you don't have those private insurance markets and then you have something happen, then it all falls on who.

It either falls on the individual consumer, total self-reliance, which, you know, the majority of Americans, 60% of Americans don't have $1,000 in emergency savings. That's not going to rebuild your house. or it falls to the government. And what that actually means is it's the taxpayer that ultimately pays for it. So then we're all kind of paying for subsidizing this risk. And that's why you need the private insurance markets. Interesting.

When you bring up the government, I think there's an interesting myth out there that I'm reading everywhere. And it's that the true issues here lie within California, New York, maybe Louisiana, because obviously we saw a terrible disaster there. Is that a myth? Is that fact or is that fiction? I'm going to call out Florida over New York. Thank you very much. Florida is a good. Yeah, yeah, yeah. Good call. No, but New York, too, as well. Okay, so yes, those are the big sort of markets that we hear about. But you want to think about those as the canary and the coal mine. They're not actually the only source of the problem. They're just sort of the leading indicators. This is coming for everybody in every part of the country. And it's not terribly new. You know, coming here to beautiful Nashville, there were the 2010 floods. Those were huge. And I ran a conference here in 2018 at the Opryland, and I remember, like, we were all, you know, it's a bunch of disaster experts getting together. So we're looking at, like, this is where the flood level was here in Tennessee.

This is inland. This is not what you're thinking about when you're thinking of storm surge or hurricanes. It's not like the wildfires that you think of in California. But we've had wildfires in central Canada. There was a wildfire in Florida this year. And my sister lives in central Massachusetts, and there was a big fire right. near her house like a couple years ago. People in areas like that, they don't have wildfire plans. They're not used to it. We don't think about it as being in those parts of the country.

So, I mean, really when you're thinking about your home budgeting, what I want everybody to do is like, yes, you have your best case and we all build on our best case. And then you need to factor in that at some point, maybe a few times in your life, there's going to be some sort of big hit that you're going to have to absorb. So you want to plan for that. It makes sense. Budgeting is a huge topic of conversation on trading secrets. And now I would say, home insurance premiums are becoming one of the largest costs for new home buyers or for any of us. Do you have any type of trading secret as it relates to think about a percentage of what the home is or how you factor in for what these costs should be given the fact that they're increasing at the rate

that they are? So I think the most important thing really is to think about the premium as the signal. That's the market signal. Okay. If your premiums are going up, that means that there is some sort of underlying risk. And you need to think about what that risk is. So insurance is just the tool. It's not actually the problem.

It's the tool that's supposed to help you deal with the underlying risk, and that's the problem. And so we don't necessarily spend a lot of time thinking about that. You know, we have the Instagram effect. We want a beautiful kitchen. We want really nice bathrooms. I fall prey to it, too. Believe me. But are you really thinking about, like, how resistant is your roof, right?

What kind of storm windows do you have? Like, how hardened is your home to disasters? That's sort of the underlying risk reduction. factor in all of this. When you talk about new building, right, where are we building? We're often building in places that are reclaimed land, and these are very vulnerable. So they look great, looks like a beautiful subdivision, you know, but we've paved over marshland with asphalt that can't absorb water, and that acts like a sink when you actually have that kind of rain that happens. So you have these homes that are just sort of sitting in these vulnerable areas. And then we grumble about

paying for the insurance premiums, but really that's the least you can do when you're thinking about all of the risk that you have when you've put so much of your net worth into your home. When someone is looking at a new home and even new construction, given what you just said about where these homes are being placed, is there a website? Is there a source? Is there a place that you can go as an independent consumer and see like where your home is and what type of risk is there? It's really hard to find and that's by design, right? Because the sellers, they don't want to share that information. The buyers, you should look for that information,

but often you don't necessarily know. And you're making the decision of where to live based on so many different factors. So, yeah, you know, you can check this information. It is public information. It's just not always easy to find. You have the FEMA flood risk maps, for example. You can Google what are the biggest risks in my area.

There's one tool who should pay.org where you can look up your zip code and you can find some general information about the risks in that area. and what they're going to look like over the next decade or so, and that should help in terms of making the decision. Because, of course, it is a huge, huge financial decision. So you want to make sure that that home is in a reasonably safe area

and that you want to know whether that property has flooded before. It's not that easy to find out. Sure. And when, you know, Zillow was including that information on the homes, you know, there was a lot of outcry about that because it was coming from the First Street Foundation, and those are models about future risks. It's not a certainty.

Okay. So if you're a seller and you're like, wow, you've just taken a significant amount off of the sale price of my home based on future risk that's based on a model and you have no recourse to complain, you're not going to be very happy. But if you're the buyer, you know, you got to look up for yourself. It's so hard for consumers to go through that practice. But especially when you drop some of the numbers that you drop, like 60% of Americans only have $1,000 in their bank account and you look at where financial literacy is today. Like we are so far behind. but if consumers can take the due diligence to just think, what am I looking at and how is that company profiting from it?

It can readjust how you're thinking. Zillow is a perfect example of that. Another example, who should pay.org, reminded me of replacement cost versus actual cash value. This is a conversation. I just bought a house in April. I'm working with my insurance. Thank you, thank you.

And I'm working with my insurance agent. and every time I work with him, he's like, here comes the pain in the ass because I'm working every angle. I got every single question. One of the conversations we had is this idea of this replacement cost versus the actual cash value and making sure that I'm insured properly, but I don't want to be overinsured. I don't want to pay premiums. I don't have to pay. Unpack that for listeners a little bit, just that overall idea.

Yeah. So you are going, like I said, there's a lot of fine print in that insurance policy. and when you take out the policy that you have, you want to ensure, you have to figure out what it is that you really feel like you need to ensure. So actual value is the cost of the thing that you have in its current depreciated state.

Okay. Right? So replacement cost means this is what it would cost to buy the thing again. Those are two different values often. Totally. Right? So like if you bought your car some time ago

or if you bought an appliance five years ago, the replacement cost is probably a lot more, especially in these times, right? So the replacement cost is often much, much higher. And then that's assuming you even have an inventory of what's in your home. Let's start there, right? Like, go through your home and take a video of all of your valuables, have an asset and inventory list,

or at least, like I said, the video is probably the low-hanging fruit here, to know what's in your home, and then save those receipts for any of those big purchases. Great idea. So that you know what's in the home, right? Yeah. And so then as you're looking at, if you've even insured the contents of your home, which is another conversation entirely, right?

When you have to provide that inventory to insurance, you have it. You don't have to do it from memory. Because if your home has been destroyed in a flood or in a fire, it's not like you can, you're going to have to reconstruct it all from memory. That's such a good take. It's like go right now, take a video of your home, take a video of every single. And, you know, I think it's also recommendations and ideas and trading secrets have to be ones that are doable. Someone's not going to go do an inventory log on every single piece in their, in their house. house and then put it in Excel and learn the valuation. There might be a couple of those people out there, Jason. Especially listening to this podcast, right?

But I would say the idea of just like, take a quick video, so then you can reference it, create a little album, call it your insurance recovery album, and you're in a better position to put yourself if one of these disasters happen. One of the things you've said before is that it starts as a weather problem and then eventually becomes that kitchen table financial problem. Walk listeners through the progression. How does a flood in one part of the country who talks about right, Florida, maybe California, how does that end up in someone else's premium?

Yeah. So the whole point of insurance is that we're pooling the risk so that it's not like you are paying in premiums so that when something happens to you, you ideally get some sort of bigger payout. Yeah. But these risks are increasing. We're seeing more billion-dollar disasters, which means more than a billion dollars on a single disaster event in damages.

And so that risk has to be pooled somewhere because, again, insurance is a business, right? like it has to have a business model. The premiums have to pay for the whatever payouts they have to do. And the premiums have to be at a rate that consumers are willing to pay for them. So if the payouts continue to skyrocket and they can't increase the premiums because people are just not going to be able to pay them, then the whole business doesn't work. And that's what we're seeing in places like California or Florida. And then you have like the major insurance companies pull out.

Then you're left with minor players who are basically like gaming the same. system often or they're like they just don't have a track record. Right. Or then you have government as the last resort. But the government is, they're not going to ensure the contents of your home like we're talking about. They're just going to ensure the basic housing stock. Okay.

So they're not going to restore your home to what it was before. They're just going to say like, okay, let's put a roof on there. Let's make sure it's like minimum livable situation. Okay. So think about everything else that is irreplaceable in the home. It's not just the valuable content. It's your family photos, right? They only heirlooms, antiques, collectibles, whatever it is that you have.

It might not have true market value, but it has a lot of sentimental value. And so there's huge trauma in losing a home. Given your expertise and exactly what you just said, I want to do a little hypothetical. You are going to assume the role of a CEO of a massive insurance company. I'm going to be the journalist, okay? Because I want to understand what the brain looks like of a CEO that's actually living, and operating in one of these companies all day and take your best stab at it. But if we're seeing premiums move at the rate that we're seeing them and we're seeing disaster numbers be in the billions,

when you are the CEO leading this company and you analyze everything you have to do with cost and risk, how do you answer what is the why? Why is it now in the billions? Why are more disasters happening more than ever? So we have how we choose to build where we choose to live and what we choose to spend our money on. And then we have the natural hazards. So the hazards happen. The disasters are man-made because we fail to prepare for them. So we're deciding to live in places that maybe we shouldn't be living in.

And then we're buying insurance on homes that maybe are not constructed to sort of the codes that they probably should be. And that's going to get worse when we talk about. talk about an affordability conversation where we're trying to lower the front, you know, the sticker price of a home. The way that you do that is by making it more cheaply, but that just kicks it down the road. So this becomes a kind of systemic level issue. And as an insurance company, you're like, okay, I need to be able to price this risk effectively. Then you need to get your own insurance for that, which is called reinsurance, right? That's spreading the risk out into the global markets.

The reinsurers have their own insurance, which is the retrosessionaires, and then often that risk will actually get cut up and put out into the markets in different types of products. So at a certain point, you worry about a systemic level risk as well, and that's where it starts to have echoes

of the 2008 financial crisis because it's systemic level risk, and it's just sitting there waiting to happen with too many big disasters. The insurance companies go under, what happens? The fastest growing businesses aren't doing more. They're delegating smarter. Upwork helps you bring in expert freelance help fast so you can delegate and keep moving. Upwork is a one-stop platform to find, hire and pay expert freelancers across web and software development, data and analytics, marketing, business operations, and more. And Upwork helps you grow your business by giving you fast access to specialized talent across 125 plus categories so you can fill skill gaps. You can browse profiles, review passwork, and get help, scoping the role, so you can hire with confidence.

And with business plus, you can access the top 1% of talent on Upwork and with AI-powered shortlisting. Upwork also cuts down operational hassle by handling things like contracts and payments in one place. It's free to sign up, and posting a job is that easy. I've used Upwork a ton to get freelancers on board. The name of the game is do what you do best and delegate what you need help with.

And freelancers are a great place to do it, and Upwork is the spot to go. Just visit upwork.com right now and post your job for free. That is upwork.com to connect with top talent ready to help your business grow. That's upw-o-k.com. Upwork.com. With the financial crisis in 2008, we saw how much change resulted from that in the benefit to prevent that disaster again. I was actually working in the banking industry at that time, and it was fascinating to see all the change. And the change so far has prevented us from another disaster. You've briefed Congress, you've presented at United Nations, you've been on every major

network talking about this. What is your, if one of that taglines and foundations of what you're saying is preparation from your vantage point, where is the preparation lacking today and what can be changed to put us in a better position to systemically be prepared? Yeah. One of it is understanding risks. So know what's in your insurance coverage. important to have that. Again, don't read the, you don't necessarily need to read all the fine print. You can feed that into an LLM at least as a starting point. Like, what do I need to think about? Like, what is included? What is not included? Real quick, let me interrupt. Some of our listeners might not know an LLM, explain it. Chat, GPD, there you go.

Claude, something like that, you know, feed in the policy and say, like, what do I need to be, like, give me the summary here. What should I be concerned about? What is not covered, right? So, like, flood is not covered for anybody. right? Earthquake is not covered for anybody. Those are separate policies that you have to buy. So you have to understand what's in your insurance. And then when you think about a home and you're thinking about like the upgrades that you can make, maybe do a little bit of a resilience audit and make sure that you are hardening the home itself. We saw some of this after the 2017 hurricane season was really, really bad and actually led to quite a lot of change. And the idea that we should not just

build back to what it was before, but that we should actually build back better. And that means when a disaster happens and you're rebuilding, you're talking about elevating homes. You're talking about hardening roofs. You're talking about doing some of these things rather than just restoring it to what it was before so that it's a sitting duck waiting for the next storm all over again. So that's the systemic level change that we need. I love it. Throughout this entire interview so far, you've given so many pieces of advice and so many things for our listeners to go do right now. But let's just do a little refresh for them. So in the next 30 days, just give me some bullet points, like steps.

If you guys are listening to this episode, this is the takeaway. Okay, next 30 days about their insurance, give me steps. Boom, boom, boom. What should they do? Research your property. Okay. If you have a property, right? Like, research your property.

If you haven't bought a property yet, make sure you do your homework before you buy that house in terms of its overall risk. Then when you're buying insurance, definitely shop around. You can actually, like, when you're buying a home, you know, get a quote for insurance and then assume that that's going to go up from there. Think about what's actually in your insurance. What really is important for you to have covered in terms of like alternate living expenses if something happens, flood insurance tacking that on, you know, just 3% of homes overall have flood insurance with the National Flood Insurance Program nationally. So flood is a major

problem. So understand what's in your insurance coverage and what you really need and understand that that's going to renew year to year. So that's not talking about the risk of the home over the next decade or 20 years. That's just the risk over the next year. Yeah. So be aware of that. And then the last thing I would say for everyone to do kind of today is just take a look at your personal and family preparedness. Make sure you have a go bag. Make sure you've talked to your family about like the basics of like communication during a disaster. Make sure that you know kind of what you would do in the event like that the worst happens right now. You mentioned that only 3% of, of, um, um,

American homes have flood insurance, right? Yeah, with the national flood insurance program. It's usually, you know, it's an add-on. Okay, it's an ad-on. And I think that's a point we should talk about. What are the most common exclusions that surprise homeowners after a disaster happens? Obviously, flood insurance probably being one of them, what others? Flood is a really important one.

You talked about actual value versus the replacement value. Alternate living expenses. So this one is really crazy. Oh, that's a big one. Yeah. So let's assume that your home is totally destroyed. Sure. You still have to make mortgage payments.

That's a fun fact for people, right? You don't have a home. It is a pile of rubble. You don't think about it. You don't think about it. But in addition to those mortgage payments, you have to live somewhere. So are you then in a rental? If it's a temporary rental, right?

Everyone, if it's a community-wide disaster, you have a lot of people who are looking for rentals at the same time. So that is going to shoot up the cost of the rentals in the area. We already know rentals have been just absolutely astronomical, right? Exactly. So then you're having to carry that. as well as pay for your mortgage. If you don't, then you're walking away from all of the equity that you have in that home because it could lead to foreclosure. It could lead to bankruptcy. So you have to maintain all of these payments. And then you're going to have to, you're going to need new things. Like you've lost everything, right? So you have to pay for these additional living expenses. And that's an add-on into your policy. But also, like as these storms are getting worse and they're happening all over the place, you know, we, like we said it's Florida, it's California, but it's other places too, right? something that you might not think about that could happen anywhere is like a hail storm.

Sure. Hail can cause a ton of damage. Oh, yeah. And it's often an exclusion in policies. So again, read that policy and know what you're excluded for and then think about the risks that are most likely to occur in your area and in your home and then see where you feel like you need to either, you know, do something to harden that home and to protect yourself or to carry additional coverage.

So research your area of living, understand the risks there. be prepared or ask the questions of what happens in a hailstorm situation, things like that, and then also look into what alternate living situations look like. Never even thought about the fact you'd still be paying your mortgage for almost nothing, depending on the situation, while still carrying the cost of alternate living. There's so much trauma that happens in a disaster situation, right? And then there's a secondary trauma of the paperwork, of feeling that you didn't have the coverage that you thought you had, that you weren't going to have the help.

you thought you were going to get. And so, you know, to the extent that you can kind of figure out and plan for that in advance on a blue sky day for the gray sky day, you'll feel a lot better. And if you think right now, like right now, if you tell me, go through this process, take three hours, two hours, do your due diligence, call your insurance agent, go shop it around. It sounds like hell. I mean, that sounds awful.

Come on, Jason. Perfect, sad. One more good to have. But when you tell me, I have to do all that and deal with the emotions that. that my family, my dogs, my life is undergoing when everything is gone, that sounds abysmal, right? So I think the point is, be proactive, not reactive, which is the same thing that you're advocating for at the highest level in United Nations.

One of the questions I would ask is, how often should we do it? Like, when, like, is this something I need to be doing weekly, daily, monthly, quarterly, annually? Hopefully not daily. Definitely don't want to talk about insurance every day. I'm starting to think my house is going to blow up. You know, at a minimum a yearly, kind of like, like I said, these premiums, these policies are often written for a year. And most people, they kind of shop around when they buy that house, right?

And they get that mortgage. They take out an insurance policy. And then they just hit renew. It's like the snooze button year after year after year after year. And you don't look at it. And maybe you're renewing something and they're adding exclusions or they're adding limits and you haven't looked at it. You haven't gotten an additional quote.

Often what you have, like they want to keep you. So that's often going to be the lowest price that you can find. But you still want to shop around and get a sense of where the market is at. And that market signal is going to be telling you something. So at a minimum, when it comes to renewal, just spend a little bit of time. Because, you know, we're talking about money here, right? Like, this is a money podcast. Yeah.

Your home is not just an asset on a balance sheet. It is that. It's very important, but it's also so much more than that. It's where you live. It's where your family is. It's so important. And it's worth spending a little bit of that boring time to protect. We're talking a lot about the cost of insurance and how it's gone up.

But one thing I could say confidently, I will be 38 this year, probably started paying for insurance. Let's just say when I was 18, 20 years. And in a 20-year history, I have never got a renewal where my insurance premiums go down. That has never happened. I don't expect that it ever will. And in my business insurance, actually, ironically enough, it was level. It was even this year. It was the same.

When I hear those things, I'm like, okay, that's a trigger. I still got to go shop. Maybe I'm being overcharged right now. Yeah. When you tell people to renew and review your policy every year, what does it look like? Where do we start? How do we do it? What's the most effective way to do it?

Yeah. So take a look at what they're offering you and then ask the hard questions. That's really important. So look at the policy and then ask about those exclusions and what they are. And you can't necessarily negotiate, but at least you can be an informed consumer and then get two or three other quotes and see what happens. And if you want to move, you move. Of course, when I was a CEO of business, I was doing this for the business, probably more than I'm doing, like, you know, at home for myself and my personal life. That's how we are, right? Like, that's a

problem. But you really need to take a little bit of that time to, to inform yourself about what those costs are. Because once you're locked in, it's really tough. And then, you know, most people will move a few times in their adult life. So it is something that you want to really think about at that point of purchase. When you're making that budget for what you can't afford and what you're going to spend money on, you want to look at this. And then you mentioned the policy level.

Of course, one thing that I do want to say is that, yes, the premiums are going to go up a little bit every year. Like, everything goes up every year a little bit. But there is some conversation about, like, can we incentivize some of these resilience measures that if a consumer does something to their roof or to their windows or to the vegetation around their home or something like that that's going to meaningfully reduce their risk,

they should see a reduction in premiums. So that's what a lot of kind of the policy level conversation is about, is like how can we reduce the underlying risk? Because the insurance is the tool that needs to continue to function to help us deal with the real problem, which is the risk. And a lot of those things that you implement, that insurance wants you to implement, is massively beneficial to you.

Obviously, to their risk, but also to you, I just had a water flood detector installed. It costs $700, $300 to install it $1,000. But the way that'll impact my premiums is so much greater than the actual cost of the unit and the installation. And I think thinking through that is it's just, it's so worth it. And it doesn't all have to cost a ton of money. Like I think about like a colleague of mine, her husband, had a work from home business. And he had servers in the basement.

Well, where's the first place that's going to flood? It's the basement. So instead of having the server racks like on the ground, they zip tied them to the roof. Okay. That will buy you at least a little bit more resilience, a few more. extra fee, right? Like those kinds of measures, they don't cost a lot of money, but they take a little bit of time, a little bit of planning. Okay, that makes sense. I'm stepping a little bit, because we're going to this conversation of renewals and costs and how to prevent costs and things

you could do to proactively prepare. Stepping a little bit out of the lane here, I'm not sure if this is your real house, but I'm just curious as a consumer. I often see with insurance agents that they're providing me quotes from similar insurance carriers. And I always think to myself, I have to imagine they have some loyalty to those carriers. or they're getting a higher insurance from those carriers, and that's why I'm always being presented, one of two carriers. As a consumer, when I look at home insurance, do you have any insight into that,

like how you can look for that questions you could ask? Yeah, so there are sort of, there are the majors, and that's what you're talking about. These are the familiar names that we think of. These are the ones that you generally want to stick to. Okay, let's hear them. Because they have a history. Okay.

Right? Because the last thing you want is you take out insurance, you're paying the premiums. Something happens, and the insurer declares bankruptcy and doesn't pay out anybody. Okay. That has happened in places like Florida where they have minors. It is terrifying, right? So, like, you want to make sure that you're dealing with a reputable company that's been around

that has a record of paying out. And then there are, you know, there's a whole level of kind of newer players that are trying to reinvent or reimagine insurance with sort of tech solutions or different sorts of mechanisms. This is a problem. It's really hard to kind of engineer our way out of the problem, to be honest. So I would say, you know, this is one area where you want to be a little bit on the safe side and you want to kind of go with the major players who have a track record and have a history. Okay. That's good advice. And I will make sure to research the insurance firm because their boutique, I am running. We've talked about a lot of opportunities for improvement here, right?

You talked about strengthening homes, community and understanding your community and understanding your location, the insurance markets. What do you think? And we've talked a lot about different solutions, but what is the functioning solution to the crisis right now that we're dealing with? And what has to happen first? It's a collective action problem. And those are really challenging to deal with, right? So in terms of like what you can control, first of all, being aware of sort of the macro risk that is around you is really important. And then you can control your own behavior and your own response to it. Even when we see there are some cities, for example, that have, you know, nuisance flooding or flood happening in different areas. People don't necessarily want to leave

their community. They don't want to leave their family far, far behind, but they could move to the higher ground within that community, right? Like, understanding what that land area was used for before we built on it is probably a good idea. You know, if that home has been, if that area has been settled for a couple centuries, it's probably on the higher ground. It's probably a safer place. So if you're looking at especially new construction, you want to do a little bit of research about is that reclaimed land, is that landfill, is it in a wildlife urban interface, which is the place that's prone to the wildfire. So just be smart about your own individual decisions and then, you know, inform yourself about what sort of these macro issues are and hopefully we will deal with

them over time. But that is challenging. Got to move in unison, which always creates a lot of trouble. And your tenure, what disaster of all the different disasters you've seen either nationally or internationally do you think has had the biggest impact on change where you've seen the disaster hit and it has just created massive, massive reform in a space that needs it? So there are two that I go back to over and over again. And that's Hurricane Katrina, 2005, and then the 2011 earthquake, tsunami and nuclear meltdown in Japan, right? because those were just in order of magnitude bigger than anything else. They were crazy expensive. They were enormous, and they were dealt with so badly because you have the natural hazard, the thing that happened, that was nature.

And then you had our man-made reaction to it, our structural problems underneath. So in New Orleans, that was the levees that burst and filled the city like a bathtub. And we were not prepared. That documentary was crazy on Netflix. It's crazy. It's really crazy. Yeah. So sad.

So when I think about like, okay, what I'm interested in is that recovery phase, when the cameras leave and people are like, okay, crisis is done. Like, what are we actually doing to change things? Well, you know, we've made some changes, which we're good, but like not as much as we should. And then in Japan, you know, I mentioned that it was an earthquake and tsunami. Japan is a very prepared place. But even they had the nuclear meltdown, right? Like that creates a huge problem. And now we're at the point where it's been, you know, 15, 20 years.

since both of those disasters. And so we're at the point where we're like, well, do we really need all of these measures in place? Maybe we don't need a professional emergency manager in charge of FEMA. Maybe we can have a political appointee, for example, something like that. And you're like, well, those are the things that we did to make ourselves more resilient after the disaster. And these things generally go in cycles.

The last one I mentioned was that 2017 hurricane season was really, really expensive and traumatic. And so that actually did lead to policy changes, talking about like the fact that we could maybe fund some resilience measures to make our communities overall safer to fix things like the levees or the aging infrastructure issues. Because, you know, I can control what happens within my condo. But like if the street floods outside, like what am I doing sweeping a storm drain in New York City? Like, I mean, people do it, but it's terrible. Yeah. So, you know, those are the kinds of conversations that we need to have. And those are the kinds of policy changes that we need to push for.

On the relief side, obviously, that's one you're very active in. What is the biggest change you think is necessary when we look into today? Obviously, we've talked about Hurricane Katrina, 2017 incident. But when we look into today on the relief side, what is the biggest change you'd like to see? I think what we need to see is actually building back better. We actually need to make changes, engineering changes, structural changes. Because if you just keep paying to rebuild something over and over and over, over again in the same place. Like, why are we doing that? Right? At a certain point, if you're keeping

insurance rates artificially low, you're interfering with a market signal that is telling people there's a risk here. There's a problem here. So if you deafen that signal because of policy, then people are going to maybe buy in places that they probably shouldn't be, right? And then who's left paying for that risk over time? It's taxpayers. When you talk about building back better, my brain goes to a lot of places. Is it the builders that are trying to increase their overall profitability, so they're decreasing their costs? Is it that the costs have gone up so significant,

so they can't afford higher quality? Or is there some type of measure you can put in place with inspections that are maybe governed and that they have a higher due diligence to give the builders the free market to do what they want, there's just some kind of compliance to make sure what they did is sustainable. Which of those and what do you do? Well, the inspector is going to inspect code, right? They're not going to say like code plus, right?

But who sets the codes, right? The codes are generally standards and they're set together with industry, which is good. I've done a lot of that work over the course of my career. It's important to get the experts who understand how these things are done in the room. But we also do need to push them to go for something that is a little higher, right? So making sure that we are building at least with a minimum level so that we don't have to then build and rebuild and rebuild, that we're building strong enough that over time

it's going to save money because the building stock is going to be more resilient to floods, two fires, to all of these things, rather than kind of essentially building matchstick disposable housing. That's a problem. That is a big problem. All right. Last, I got two more questions for you. We talked about AI a little bit, right? So chat, Claude.

How can consumers, I got to imagine that right now there's being some kind of tools are out there with AI to check where you live, your location, to understand risks associated. And also, if it hasn't happened yet, there's going to be some kind of insurance breakthrough where consumers can use AI to really benchmark all these things that we're talking about. What's covered? What's not covered, is it the right premium? Does the company have the history necessary to make the coverage? How are you seeing AI play into this game and as consumers?

What should we know? Yeah, so the modeling is where this really comes into play, right? Processing big data, making information available to people. And there's all kinds of tools that can happen here. Even if you look at community boards that have been taking notes and saving them somewhere in PDFs, right? Making that information searchable and visible through AI to be able to aggregate this data and make it available to people. It's not that it's not there.

It's just hard to get to. So I think AI is going to really change that where we can find the answers quickly that we need in a timely manner so that we can make change happen. So on the one hand, it's the modeling, it's the sensors, it's the early warning systems to say that, like, hey, something could go wrong.

We just saw this with the Venezuela earthquake and the phones. You know, Google with the Android phones and the Android software was able to detect the earthquake up to a couple of seconds. to a couple of minutes before people were feeling the tremors. So that's the kind of tech innovation that I think really shows potential and could be really cool to ideally use things that we use in our daily life that we don't have to think about

that can make a big difference when it comes to a disaster. So interesting to learn about how technology is going to help us prevent these disasters and move forward. We've talked about solutions. We've talked about change. We've talked about what's happening. I guess the last question I have for you is, does this crisis get solved? or do we have a permanent shift in what it means to own a home in 2026?

I don't think it ever gets solved. That's the thing about resilience. It's maintenance forever. So I think that the deal, the story of premiums increasing over time, that's going to continue to happen as long as we're building in vulnerable places and we're not building in a resilient manner. So we need to fix that underlying crisis to be able to deal with the insurance problem overall. It's a complicated. It's layered, but it's a layered, complicated situation in crisis that

impacts literally every single person in this country. You know, whether you're a child living in your parents' home or you are a parent downsizing or upsizing because of the size of your family, your first time homebuyer, it impacts every single one of us. And I think some of the messages here are so clear. Yeah, but I would say knowledge is power, right? So like in the markets, insider trading is illegal. Right. In real estate, it's the status. quo. So nobody's going to tell you something. That's so true. Oh my God. Sadly, from the agent to the builder to the location. I saw the funniest viral video the other day and it broke down what a real estate agent's saying versus what it means when they're like,

oh, this is unique and then it will show you this. Or, you know, they'll have it like, this is budget friendly, but what it actually means. And you're exactly right. Yeah. So you want to make sure that, you know, there are great real estate agents out there. You want to find a good one who's working for you and asking those tough questions, but you want to give yourself the knowledge to be able to ask the right questions. And there's great builders. There's great insurance companies. There's great insurance agents.

There's great inspectors. All the things that we're talking about. But there's also another side of that coin. And as consumers, I think we have to be aware of it. And I think a big theme today is that, yes, your home is on your balance sheet. It's an important part of your net worth, but that is not it. There's so much more to it. And when disaster happens, the responding is going to be 10 times harder than consumers today doing and understanding what they need to protect themselves.

And we all have an onus to do that. And I think spreading this message to make consumers and put them in a better position is so important. Because like you said, we all have to move in unison. And moving everyone in unison is nearly impossible. So then as consumers, we have to say, what can you do to protect yourself, your family? your legacy, your next generation. And so I think this has been an awesome conversation. But, Chloe, we have to wrap with the trading secret, the name of the show. So you've given about 1,500 trading secrets today. But if you could bring down one, it could be anything within this

space, it could be advice to a consumer, it could be a life or career lesson, but it's a trading secret. You talked about how giving and set of information in trading is illegal, but in the real estate market, it's accepted and promote it. Trading secrets, all this information, it's free. and it's empowering others to be better. So give us your trading secret. So I would say that buying a home is the path into the American dream. But I would say in today's world, you want to make sure that you are fully diversified. So when you are making that decision, when you are writing that big check, just make sure that you are properly budgeting in for avoided losses.

Something is going to happen down the road. So make sure you have that rainy day fund set aside because you can, You cannot control the hazard. You cannot control the risk. You can control your preparation for it and your reaction to it. I love it. Brilliant trading secret and things I've learned that connect to your trading secret are rising premiums are affecting everybody.

It's not just specific to one state or one city. Insurance does not cover everything, right? No. Loud and clear. You heard it. It doesn't. And it's your job to understand what it doesn't cover so that you're prepared for all the situations, including disasters.

and this whole ideology that there's nothing I can do is it's simply wrong. Like there is so much that we can do. And knowing that there's so many headwinds in this space, it's even more important that we do do it. So, Chloe, thank you so much for me on Trading Secrets, very educational and informational. Where can everyone find you if they have questions or support your current businesses and everything that you have going on? Sure. You can follow my website, Chloe Domrovsky.com. You can find me on LinkedIn, all the major social channels.

I'm here. I'm happy to help. Awesome. And check out Forbes, Forbes Senior contributor, right? You're at CNN, MSNBC, Bloomberg, CNBC. You'll be on TV, News Nation, all the good stuff. So, Chloe, thank you for being on Trane Secrets. Thank you, Jason.