The US government has released sweeping data showing that climate change is eroding the American home insurance market, with cancellations and non-renewals increasing in high-risk areas due to rising costs and claims. The Treasury Department analyzed 246 million insurance policies issued by 330 insurers nationwide from 2018 to 2022, revealing that homeowners are being left exposed to financial ruin as they struggle to pay premiums.
Insurers are canceling or refusing to renew policies for thousands of homeowners in coastal areas and parts of the West, particularly those affected by hurricanes, wildfires, and other extreme weather events. The data shows that cancellation rates were highest in states like South Carolina and California, where homes are most exposed to climate disasters.
The rise in cancellations is not only affecting individual homeowners but also having broader consequences for communities and local businesses. Property-tax revenues decline if homeowners can’t rebuild or if homes lose value, while tax receipts from homeowner insurance claims support these communities’ budgets.
The Treasury Department’s effort to gather data was complicated by political clashes over climate change regulations and state oversight of the insurance industry. Despite the challenges, the department has called on state commissioners and the National Association of Insurance Commissioners to work with its Federal Insurance Office to collect and publish annual data, expanding coverage to high-risk pools.
As climate change worsens, more Americans are risking financial ruin by dropping their home insurance premiums, leaving them vulnerable to catastrophic losses. The stakes are clear: addressing the impact of climate change on the American home insurance market is crucial for protecting homeowners, communities, and local economies.
Source: https://www.nytimes.com/interactive/2025/01/16/climate/home-insurance-cancellations.html