Probably 6 or 7 years ago, I got an email out of the blue from a local insurance agent, well known in the industry, and a pillar of the local Republican establishment.
He had heard me on the radio and wanted to have coffee. We’ve met several times, and continue to exchange emails. He agrees that something is going on that is very concerning to his industry. Here’s a message I got from him a few years ago.
In my 30 years I have never seen anything like what is happening right now. I sit on several different advisory boards and insurance companies are scared to death about the trends they are seeing. You’re correct, it’s not just coastal areas either, which by the way are nearly impossible to insure right now. I had two house last week in Hilton Head where the premium went from $12k to over $30K and they were lucky to get the $30K. There was nothing else on the market.
The New York Times has a new piece about Home insurance emerging as an issue in the current election campaign. According to the Times,
Rising homeowners rates — driven by the fires, hurricanes and tornadoes worsened by climate change — have helped put reliably Republican states like Kansas and Florida onto the battlefield, pushed North Carolina toward the Democrats and roiled Democratic politics in California.
Severe weather and natural disasters continue to drive higher home insurance rates heading into 2026. Following four consecutive years of rising premiums, the average annual cost of home insurance will increase again in 2026, with Insurify projecting a 4% jump to $3,057 by the end of the year.
Homeowners are reducing their coverage, raising their deductibles, and shopping for different policies as premiums increase. The average annual cost has surged more than $900 since 2021. Six states saw rates rise at least 20% in the past year: Minnesota (34%), Colorado (33%), Iowa (28%), Nebraska (25%), Oklahoma (24%), and South Carolina (20%).
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This week in the Guardian, an anonymous writer said to be an Insurance Industry insider reveals concerns about the industry’s ability to adequately price in climate risk. He (or she) writes:
In the face of ever more extreme and unpredictable climate risks, I am coming under pressure to cut my forecasts for the losses that disasters will cause in order to make insurance more affordable – and get my employer more business. In some instances, the questioning of our numbers and models is justified. But too often, it is not being done to produce more accurate models, but to artificially lower prices. If this is happening at my firm, which is struggling to compete with rivals’ prices, it’s happening elsewhere.
Severe Convective Storms (SCS)—the hail, tornadoes, and derechos that peak from June through August—now generate more cumulative insured losses than tropical cyclones.
These storms rarely dominate national headlines. A hailstorm in Kansas or a tornado touching down in rural Oklahoma doesn’t command the same attention as a named hurricane making landfall. But they have become the most expensive insured peril of the 21st century.
By the numbers:
- In 2025, 21 of the 23 billion-dollar U.S. disasters were severe convective storms.
- Munich Re puts U.S. severe thunderstorm losses at $56 billion for the year.
- The average per-event cost is now 31% higher than it was a decade ago.
The Insurance Journal reported in January that “Severe convective storms (SCS) have surpassed tropical cyclones to become the costliest insured peril of the 21st century..”
Below, last year, Minnesota Senator Tina Smith questioned then- Fed Chair Jerome Powell about the impacts of rising Insurance rates.
A recent survey by the group Data for Progress seemed to indicate that, while voters are concerned about Insurance costs, they have not yet made a strong connection to the effects of climate change.
