Americans in disaster-prone areas are paying 82% more for home insurance than those in low-risk zip codes
Climate Crisis Drives Soaring Insurance Costs, Leaving Homeowners Vulnerable
Homeowners across the U.S. are struggling to afford skyrocketing insurance premiums as the climate crisis fuels a surge in natural disasters, according to new federal data from the U.S. Treasury Department.
Sharp Rise in Premiums for High-Risk Areas
The report—the most comprehensive analysis to date on insurance and climate risk—reveals that insurance premiums have surged nationwide, with the steepest increases hitting homeowners in climate-vulnerable areas.
Between 2018 and 2022, residents in the top 20% of climate risk zip codes paid, on average, 82% more for insurance than those in the lowest-risk areas.
The intensifying threat of wildfires, hurricanes, and flooding has forced many insurers to either pause coverage or pull out entirely from disaster-prone states like Florida and California, where wildfires currently threaten Los Angeles.
Homeowners Losing Coverage as Insurers Withdraw
As costs soar, more homeowners are unable to afford their premiums, leaving them financially exposed when disasters strike. The report found that in 2022, insurers canceled at least 10% of policies in over 150 high-risk zip codes.
The findings add to mounting evidence that Americans are already paying a high price for climate change, despite Donald Trump’s repeated claims that the climate crisis is a "hoax."
“We Are Marching Towards an Uninsurable Future”
“We are marching toward an uninsurable future,” warned David Jones, former California Insurance Commissioner.
“This report confirms that climate change is making insurance more expensive, harder to find, and less reliable,” Jones said.
He emphasized that while the future looks bleak under Trump’s leadership, the report underscores the urgent need to cut fossil fuel emissions to mitigate the crisis.
“Insurance is the canary in the coal mine when it comes to climate change—and that canary is nearly dead.”
Government-Backed Insurance Programs on the Rise
With insurers retreating, states have been forced to establish government-backed insurance programs to fill the gap. However, this approach is unsustainable, experts warn.
The Los Angeles wildfires, which could become California’s costliest fire disaster ever, may drive even more insurers out of the state or push premiums even higher.
Final Report of the Biden Administration
The Treasury report, released in the final days of the Biden administration, was based on data from 330 insurers and 246 million homeowners. However, seven states—including Florida, Louisiana, and Montana—declined to participate, while Texas withheld some data.
“This report identifies alarming trends in the rising cost and decreasing availability of insurance,” said Janet Yellen, Biden’s Treasury Secretary. “These factors threaten the long-term financial security of American families.”