It’s never been more expensive to shop in the Hamptons. At the end of 2025, The average sale price reached a record $2.34 millionwith sales over $10 million up 75 percent from the previous year. On paper, one of America’s most climate-exposed luxury markets has never looked stronger, even as the risks underneath continue to grow.
The same coastline looks completely different when seen through the eyes of an insurance broker. National and regional carriers have stopped writing new coverage for homeowners in eastern Suffolk County and, increasingly, across Long Island. “In terms of underwriting, this is the worst market I’ve ever experienced,” said Dermot Dolan of Hamptons Risk Management in Bridgehampton, a 30-year industry veteran. told the Southampton Press in November 2024. New York’s stopgap, the Coastal Market Assistance Program (C-MAP), now serves as the last resort for homeowners whose carriers have withdrawn coverage. Data from the Senate Budget Committee published in December 2024 highlights the trend. Of the 100 US counties with the highest home insurance non-renewal rates in 2023, 82 were prone to coastal or wildfires. The underlying message could not be clearer. Climate risk is no longer hypothetical, and insurers are voting with their feet by reassessing – or pulling out of – the most exposed markets.
At first, record prices alongside vanishing insurance may seem counterintuitive. However, this view overlooks the underlying dynamic. Insurance typically shapes property markets through strict mortgage requirements. Under normal circumstances, lenders require coverage, premiums dictate carrying costs, and uninsured homes simply cannot be financed. In the Hamptons, this mechanism is completely bypassed. Fueled by the wealth of Wall Street, the ultra-luxury market is currently thrives on cash deals from buyers flush with liquidity. Without a lender, the insurance mandate disappears from the transaction and becomes a private responsibility for the buyer. Physical danger remains. It is simply privatized.
This migration is now visible in the way some of the country’s largest private fortunes manage coastal properties. Donald Poster, who leads Aon’s family office practice, described this new book for Crain Currency. Families with inherited properties without a mortgage are buying $20 million or $50 million of coverage on a $100 million home and using their liquidity to self-insure the rest. Enforcement measures that were once simple recommendations are now what insurers call “subjectivities,” meaning mandatory coverage conditions. Parametric policies, which pay for a triggering event rather than a settled claim, are only applicable when there is no lender to dispute. Erosion, the hazard that defines any coastline, is gradual and by no means certain. And there’s a cap on even larger balances. Spending $1 million a year to insure a $100 million home is a scenario where many walk away from a purchase, Poster noted.
Look closely at that playbook and a familiar institution comes into focus. Underwriting adjudication, risk engineering, disaster response and even pre-positioned private firefighting capacity are the functions of an insurance company, reassembled within a family office. Carriers did not stop performing these functions because the danger disappeared. They reassessed the risk, and owners who could afford it took those functions in-house.
The broader market is adopting similar strategies. Main carrier It goes all over the country high net worth private client segment in 2023. In California, Surplus Line Association reported a 119 percent increase in homeowner transactions in the excess lines market, where pricing is unregulated and coverage is discretionary, during the first half of 2025. Swiss Re’s sigma report for 2026 describes increase in insured losses as structural and not cyclical. This change did not occur because coastal areas suddenly became more dangerous, but because hazard models now reflect current conditions. As risk becomes apparent, it is assessed and must be absorbed. This process ultimately shifts climate risk from communal pools to private individuals. The Hamptons perfectly exemplifies this trend. It is where this massive transfer of risk is most pronounced, but less visible in property prices.
For families holding coastal assets across generations, the arithmetic below is uncomfortable. First Street Analysis February 2025 projects $1.47 trillion in net loss of U.S. property value by 2055 in insurance costs and changing asking price exposure, with 84 percent of neighborhoods affected to some degree. A legacy home is held over a 50-year horizon and signed 12 months at a time. The gap between these two hours was subject to December 2025 Yale Law Journal Essay on the climate threat to property insurance, and that is why insurance now belongs on the agenda of the family office’s investment committee rather than the agenda of the property manager. What assets does the family insure itself, with what loss limit, with how much capital held against the answer? How much does strengthening cost and what is the return on premium and insurance? What properties does the next generation actually want to inherit along with their risk? These are capital allocation questions, and households that answer them earlier are treating adaptation costs as an investment rather than a cost. HOW Norges Bank Investment Management’s – the world’s largest sovereign wealth fund –approach to natural hazardsthey see resilience as a prerequisite for long-term returns rather than a gesture towards them.
This is beginning to change what wealth management means. For a generation, this meant the division of assets, taxes and inheritance. The other version adds insurance as a stable column, kept alongside liquidity and yield, because an asset that cannot be insured cannot be held or passed reliably. An heir now inherits the signature file along with the deed. Households that treat that file as a wallet entry rather than a household expense are the ones most likely to still be coasting in 30 years.
The insurance industry spent 40 years providing the assumption that coastal conditions would return to a predictable baseline. Like me wrote for the Observer in Maythis assumption has been abandoned by institutions that have valued it, from reinsurers to sovereign wealth. What the East End shows is the same retirement achieving private wealth. Record prices in the Hamptons are not evidence that capital disagrees with underwriters’ valuations; instead, they show how these valuations are absorbed into a market with sufficient liquidity to treat them privately. For decades, buyers focused on a property’s closing value. Now, the critical question is who bears the risk when the insurers do not. In the East End, that responsibility is already embedded in the work.
