The Senate Budget Committee, chaired by Senator Sheldon Whitehouse, held hearings on the impact of climate amplified weather extremes on homeowner insurance, December 18, 2024.
The insurance crisis spreading across the United States arrived at Richard D. Zimmel’s door last week in the form of a letter.
Mr. Zimmel, who lives in the increasingly fire-prone hills outside Silver City, N.M., had done everything right. He trimmed the trees away from his house, and covered his yard in gravel to stop flames rushing in from the forest near his property. In case that buffer zone failed, he sheathed his house in fire-resistant stucco, and topped it with a noncombustible steel roof.
None of it mattered. His insurance company, Homesite Insurance, dumped him. “Property is located in a brushfire or wildfire area that no longer meets Homesite’s minimum standard for wildfire risk,” the letter read. (Homesite did not respond to a request for comment.)
Mr. Zimmel has company. Since 2018, more than 1.9 million home insurance contracts nationwide have been dropped — “nonrenewed,” in the parlance of the industry. In more than 200 counties, the nonrenewal rate has tripled or more, according to the findings of a congressional investigation released Wednesday.
As a warming planet delivers more wildfires, hurricanes and other threats, America’s once reliably boring home insurance market has become the place where climate shocks collide with everyday life.
The consequences could be profound. Without insurance, you can’t get a mortgage; without a mortgage, most Americans can’t buy a home. Communities that are deemed too dangerous to insure face the risk of falling property values, which means less tax revenue for schools, police and other basic services. As insurers pull back, they can destabilize the communities left behind, making their decisions a predictor of the disruption to come.
Now, for the first time, the scale of that pullback is becoming public. Last fall, the Senate Budget Committee demanded the country’s largest insurance companies provide the number of nonrenewals by county and year. The result is a map that tracks the climate crisis in a new way.
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Senator Sheldon Whitehouse, Democrat of Rhode Island and the committee’s chairman, said the new information was crucial. In an interview, he called the new data as good an indicator as any “for predicting the likelihood and timing of a significant, systemic economic crash,” as disruption in the insurance market spreads to property values.
“The climate crisis that is coming our way is not just about polar bears, and it’s not just about green jobs,” Mr. Whitehouse said Wednesday during a hearing on the investigation’s findings. “It actually is coming through your mail slot, in the form of insurance cancellations, insurance nonrenewals and dramatic increases in insurance costs.”
The map of dropped policies shows how the crisis in the American home insurance market has spread beyond well-known problems in Florida and California. The jump in nonrenewals now extends along the Gulf Coast, through Alabama and Mississippi; up the Atlantic seaboard, through the Carolinas, Virginia and into southern New England; inland, to parts of the plains and Intermountain West; and even as far as Hawaii.
The Times also has an interactive map which shows areas with highest rates of non-renewal.
The insurance crisis has also spread far beyond the coasts, with rates of dropped policies jumping in many U.S. counties over the past several years.
Those spikes may come after a large disaster hits, but not always. In some places, such as Oklahoma, they coincide with growing premiums, but in others, insurers and state regulators may keep prices flat while dropping policies.
Communities deemed too dangerous to insure risk seeing property values fall, along with local tax revenue, stripping money from schools, police and other basic services. As insurers pull back from areas across the country exposed to climate change risks, where policies aren’t getting renewed is a key predictor of the disruption to come.
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FYI, the Republican minority also produced a witness who claimed that Climate impacts were only a small influence on insurance rates and non-renewals.