I think the problem is that even if the houses are far back enough that they are 1m about sea level, they are now at extreme risk of destruction if there is a major weather event where they might have previously avoided it.
I don't think it is fair to say that they are now at an extreme risk of destruction.
Risks always exist. The risk of flooding is probably some small percent higher than it was 10 years ago, and 10 years before that. The risk will increase over the next 100+ years until the homes are destroyed.
It seems like a problem that will work itself out. Either insurance will go up, the house value will go down, or both.
In the mainland US, houses right on the shore that are likely subject to storm surge are covered by some kind of government program since private insurance won't touch them. I have forgotten the details, unfortunately.
