Climate disasters could increase insurance rates for millions of American homeowners in the coming years.

Approximately 39 million homes and commercial properties – or 27% of properties in the Lower 48 – may see their premiums spike as insurers struggle to cover the increased cost of rebuilding after disasters, according to a report by nonprofit research group First Street Foundation.

America’s homeowners’ insurance market is facing yet another alarming trend. Major insurers have pulled out of or stopped writing new policies in California, Florida, and Louisiana, in part due to more destructive wildfires and stronger hurricanes in recent years.

However, First Street found that insurance prices are still rising in places we think are less risky, even though they have already soared in those states.

“This isn’t just isolated to particular areas of the country, but will also impact areas that we typically might not think of,” said David Jones, former California insurance commissioner and director of UC Berkeley’s Center for Law, Energy and the Environment’s Climate Risk Initiative, who was not involved in the study.

One of the report’s lead authors, Jeremy Porter, the head of climate implications at First Street, says the insurance industry is just beginning to price the cost of climate change into premiums.

As far as pricing climate risk into the real estate market is concerned, we’re still at the forefront of the industry. It is likely that insurance companies will continue to respond to the increasing climate damage.”

As private insurers withdraw from high-risk areas or restrict coverage, homeowners have fewer choices between companies.