Where home insurance is shrinking as extreme weather worsens
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More homeowners facing risks from extreme weather like wildfires and hurricanes are being dropped by their insurance companies, new data shows.
Why it matters: Getting a mortgage without home insurance is almost impossible.
- And as climate risks grow, fewer available options could hike costs for homeowners and push more to public plans.
The big picture: Some insurers have stopped offering new homeowner policies in places prone to climate change-related disasters, including California, where deadly wildfires burned thousands of acres across the Los Angeles area.
State of play: Policy non-renewals are ramping up in states beyond high-risk California, Florida and Louisiana, per data from a congressional investigation, first reported by the New York Times.
By the numbers: The share of U.S. home insurance policies not renewed ticked up to 1.06% in 2023 from 0.8% in 2018, according to the data.
- In Los Angeles County, 1.43% of policies were not renewed, compared with 0.86% five years earlier.
What they're saying: Rising home non-renewals "spells trouble for property values in climate-exposed communities across the country," Sen. Sheldon Whitehouse (D-R.I.), the outgoing Senate Budget Committee chair who led the probe, said in a news release last month.
- But an insurer trade group warned that non-renewal data is "unsuitable" for understanding climate change impacts, per the NYT, as it doesn't explain why companies made their decisions.
Reality check: Many people still move to disaster-prone areas, while others can't afford to leave.
What we're watching: Insurance prices are often the first way that "climate risk becomes tangible to people," Jeremy Porter, a lead climate researcher at risk modeling firm First Street, tells Axios.
- It's one reason Zillow home listings now offer shoppers a combined look at insurance recommendations and climate risk information.
