Senate Report: 1.9 Million Property Insurance Policies Canceled; Premiums Up 44% 2014 - 2021

[hatrack]

Five hurricanes made landfall in the United States this year, causing half a trillion dollars in damages. Flooding devastated mountain towns along the East Coast. Scores of wildfires burned almost 8 million acres nationwide. As such events grow more common, and more devastating, homeowners are seeing their insurance premiums spike — or insurers ditch them all together.

An analysis released Wednesday by the Senate Committee on the Budget found that the rate at which insurance contracts are being dropped rose significantly in recent years, particularly in states most exposed to climate risks. In all, 1.9 million policies were not renewed. “Climate change is no longer just an environmental problem,” Senator Sheldon Whitehouse, a Democrat from Rhode Island, who chairs the budget committee, said at a hearing on the matter Wednesday. “It is an economic threat, and it is an affordability issue that we should not ignore.”

For those with insurance, premiums rose 44 percent between 2011 and 2021, and another 11 percent last year, according to another report the congressional Joint Economic Committee released this week. A Democratic analyst on the Joint Economic Committee, or JEC, who requested anonymity to comment publicly, said: “The model of insurance as it stands right now isn’t working.” The JEC report included a state-by-state breakdown of premium increases and risk ranking based on climate perils. Florida topped the list on both fronts, and saw a whopping $1,272 climb in annual premiums between 2020 and 2023. Michigan saw the smallest increase at $136. No state saw a decrease over that time.

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What is clear is that costly natural disasters are becoming more frequent, with the average time between billion-dollar events dropping from four months in 1980 to approximately three weeks today. As those risks grow, some insurers are pulling out of states entirely. For example, State Farm and Allstate have left California, and dozens of smaller companies have collapsed or fled Florida and Louisiana. When that happens, homeowners must turn to government-backed insurers of last resort, which are available in just 26 states and typically cost more than private coverage. Enrollment in those state-run plans has skyrocketed, the JEC report notes, and they now cover more than $1 trillion in assets.

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https://grist.org/economics/new-data-shows-just-how-bad-the-climate-insurance-crisis-has-become/

[CountAllVotes]

1. State Farm Ins.

My friend had State Farm. They canceled him and now he has nothing and the state run plan is a huge rip-off he told me.

My policy went up a lot the past three years in a row but I was not canceled. I have AAA.

This is so wrong!