Climate-driven floods, droughts and heatwaves are pushing properties in the EU into “uninsurable” territory, putting mortgages, insurers and financial stability at risk, warns WWF.
Climate-related disasters — from floods and droughts to extreme heat — are increasingly making properties across the European Union uninsurable, creating a knock-on threat to mortgage lending and broader financial stability, warns a new WWF analysis.
How uninsurability becomes a financial crisis
Insurance is a basic requirement for many mortgage products. When insurers withdraw cover or hike premiums for homes in high-risk areas, properties can become effectively unfinanceable: lenders are reluctant or unable to offer loans without insurance, and owners lose access to mortgages and refinancing. That creates a vicious cycle that shrinks housing supply, depresses market liquidity and raises systemic risks for banks, insurers and public finances.
Cities and assets most exposed
The WWF report highlights that hundreds of billions of euros of real-estate value are concentrated in cities with high climate exposure. Key urban centres singled out include Rome, Istanbul, Barcelona and Athens, while Paris registers one of the largest totals of vulnerable property value in Europe. At the same time, once-safe neighbourhoods are moving into higher-risk categories as extreme events become more frequent and intense.
Rising costs and a coverage gap
Insurers are already passing growing climate costs on to households and businesses. Premiums are rising and, in many cases, cover is being restricted or withdrawn. Historical data underline the scale of the challenge: between 1980 and 2023 only a small share of economic losses from extreme weather were covered by insurance, exposing a structural protection gap that leaves households and governments to pick up much of the bill.
Economic and social consequences
The implications extend beyond individual homeowners. Higher insurance costs strain household budgets and business operations, while larger, recurring disaster payouts pressure public finances. If uninsurability spreads, lenders may tighten mortgage criteria, amplifying financial exclusion and limiting access to housing credit — particularly in coastal and climate-sensitive regions.
Urgent measures to build resilience
WWF urges governments, regulators and the private sector to act now to prevent a systemic collapse of property insurance in the EU. Key recommendations include:
• Comprehensive assessment and disclosure of environmental risks by regulators and companies.
• Strengthening insurance frameworks and implementing risk-sharing arrangements between insurers and states.
• Prioritising nature-based and green adaptation solutions that reduce hazard exposure.
• Requiring credible corporate transition plans and integrating climate risk into financial supervision.If policymakers move promptly to combine adaptation, smarter land-use planning and targeted risk-pooling mechanisms, they can reduce the number of properties that become uninsurable and protect access to mortgages and financial stability. Without decisive action, the growing climate-insurance gap risks becoming a structural threat to Europe’s housing markets and broader economy.
