Why Americans Are Suddenly Losing Their Home Insurance

Many homeowners in the U.S. are losing their home insurance policies. Major insurers like State Farm and Allstate are no longer offering new policies in California. State Farm attributes this to increased wildfire risk, inflation and other challenges in the region. Louisianan and Floridian homeowners are facing similar issues due to flood risk. Watch the video to learn more about why homeowners are receiving non-renewal notices and what that means for the U.S. real estate market.

Chapters:
0:00 Introduction
1:47 Chapter 1: The insurance market
5:03 Chapter 2: Alternate options
9:14 Chapter 3: Pricing in climate risk

Produced and Edited by: Lindsey Jacobson
Additional Camera by: Juhohn Lee
Animation: Jason Reginato, Andrea Schmitz
Additional Footage: Getty Images, Darlene Tucker
Additional Sources: State Farm, U.S. News & World Report, Insurance Information Institute, U.S. Bureau of Labor Statistics

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Why Americans Are Suddenly Losing Their Home Insurance

[sarawilliam]

The issue is that either the renter or the owner must in some way pay insurance and property taxes if they want a "permanent roof" with utilities like electricity, gas and water. Because of this, many people—at least in California, where I currently reside—are living in tents. No taxes, rent, mortgages, or insurance. The number of people who tell me they live in their car that I meet amazes me. Its crazy out here!

[dehoyosrudolph]

Paid $400k for their home 18 years ago, and still owe $360k?? I think they used that home as a piggy bank with home equity loans.

[ShellyHuerta]

This is my fifth year after retirement. I’ve been following the 4% rule thing I saw on a YouTube channel, but this isn’t really how hard I expected things to be. After I cashed out a lump sum, I still have about $760k left, but at this rate, and with how the market is (we were putting money away in an index fund), I’m starting to get worried.

[NicholasBall]

I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.

[turbotoommyguns]

Listen to what theyre saying, insurance companies are straight up Business only!
They are NOT like a good neighbor. You are a number with a risk, nothing like a neighbor

[KarenLavia]

I’m a new dad, I moved to the Bay Area a few years ago and I’m thinking of purchasing a single family home, but with real estate prices currently through the roof, is it still a good idea to buy a home or should I invest in stocks for now and just wait for a housing market correction? I heard Nvidia and AMD are strong buys.

[andrewschafer]

I received a non renewal letter from nationwide saying I needed to replace my roof in 30days.. I spent the money and got it done. My contractor sent me a one item invoice remove and fully replace the roof. Nationwide turned around and said if your roofer doesn’t provide a line item invoice for every task he did we will still drop you. lol so my broker shop all my insurance policy’s and we switched. If nationwide doesn’t want my business fine. Other companies will happily take it. That’s what we did. Saved money as well.

[Lauragraceabels]

Insurance can be an effective tool to protect your financial security while leaving a larger estate for your beneficiaries, providing a cushion for transitioning a business to the next generation, and covering taxes and other major expenses resulting from estate liquidation.I will assess your current insurance coverage and identify any risks to your financial security, filling any gaps in coverage, including death, disability, and critical illness.I will show you how to get better value for premiums paid by managing insurance as a cost-effective defensive strategy.

[olzt]

Insurance companies are moving out of high risk areas and getting states to increase premiums in low risk states to make up the loss of business.

[davidlorang]

I’m in Construction. On a new home build I pay 150 dollars a square for a 30 year asphalt shingle roof.
After a hail storm I can charge 550 dollars a square to replace a 30 year asphalt roof. The only difference is the tear off. (Which is a very small portion). This is only allowed because “insurance” is paying for it. This is why insurance companies are leaving. Some contractors go to schools to become Storm Chasers. The system is broken.

[Astro-ctqn]

Car insurance is getting ridiculous too

[Americarunsonduncan]

I live in Oklahoma. My homeowners insurance went up a whopping 280% in one year!!! I bought my home just two years ago and am only 25 years old. I called my insurance agent and even multiple agents nearby and all the rates were the same or higher. It is a truggle to have the highest premium homeowners in the nation, despite being among the lowest paid workers.

[coronabuster]

Here is what I learned after Katrina, if you have faithfully had home insurance they will fight you every step of the way so they don't have to pay out. They kept my mom in court for years, and they did stunts like pulling up weather reports from the wrong state and giving her the report with just the county name but not the state. They offered her a pittance of what she was insured for.
She finally gave up because her new husband pitched a fit about the time it was taking.
Now she puts the money aside that she would have used to pay insurance for problems that come up..Granted she owns her own home.

[scpatlnow]

The simple truth is that we are allowing people to build in places that have no business being built up. Especially in Florida where they backfill some swamp and throw a subdivision on it only for it to suffer from sink holes or flooding, because those swampy areas served a purpose for flood mitigation. Take it away and the water has nowhere to go. Then you have cities like Miami which even on a sunny day will have flooding during a King Tide. You can't expect insurance providers to cover those risks when the state government refuses to even acknowledge that climate change even exists

[blaster-zyxx]

I looked it up and that is correct. Almost 40% of homes carry no mortgage. I’m surprised .

[introvertsrock]

Should talk about insurance companies more:
How much their CEOs are paid?
How much they spend on their ads?
How much they spend on customer service or how they decreased C. Service locally?
They used to care & now they treat their customers like a # once they make the sale.

[hudooguru]

"retired" with a 360k mortgage? I'm beginning to see the problem...

[dylanfgarrison]

Something doesn’t add up here. These people bought a house for $400, 000.18 years ago and now owe $380, 000? Sound like typical spend spend spend boomers who’ve been pulling equity out of that house this whole time. This home should be 2/3 paid off by now.

Anyone who owns more than one horse on their own property certainly can afford an extra thousand dollars per month. Just sell one horse! And when she says she’s moving I called BS. Again, she loves her horses, where exactly are they going to move to where they can keep their horses for less? I have zero sympathy for these people.

[Mjln]

We live in a suburb in Boston, quite a ways from the coast, so we are not in a high-risk area. But our insurer of over 30 years, Mapfre, has tried to refuse to renew our insurance. After fighting with them, and spending $20k on a new roof that we didn't need, we finally got them to agree to renew our policy, but at a 40% increase in price.

We have never missed an insurance payment nor have we ever had a homeowners insurance claim, and yet they have still tried to drop us. I don't know what the answer is, but it is very clear that insurance companies do not deserve your loyalty.

[kenofken]

This isn't just high risk states. I live in the Midwest far from the fire or hurricane zones. My insurance doubled over the last year.

I have a good agent and went over everything with him and was able to get it down, but a lot of that meant taking higher deductibles for things. I was also able to reduce or eliminate some coverage I simply didn't use, like a clause that would have covered $20, 000 in loss of "accessory structures" of which I have none. I got it back to within distance of what it had been but what happens next year and the year after? I'm sort of out of clever areas to trim the policy. It's going to get to the point where a lot of people are going to be faced with insurance premiums equal to what they pay in mortgage, and if you have a mortgage, you can't get rid of the insurance.