08/27/2024 | News release | Distributed by Public on 08/27/2024 14:36
As extreme weather events increase in frequency and intensity in California, the homeowners insurance market is facing unprecedented challenges, adding to the state's home insurance coverage crisis. Over the past few years, disastrous wildfires have been a key driver of coverage reductions. As insurance companies continue to cancel policies and hike rates, some homeowners are facing high insurance premiums or struggling to find coverage. As a result, most Californians are concerned about increased costs as well as heightened climate risks.
According to the July PPIC Statewide Survey, eight in ten Californians are either very (47%) or somewhat (34%) concerned that home insurance will become more expensive due to climate change risks. However, there is some demographic and regional variation when it comes to the share who are very concerned. Majorities of adults ages 45 and older (54%), residents earning more than $80,000 (54%), college graduates (52%), Asian Americans (51%), and Inland Empire residents (51%) are most likely to express that they are very concerned.
Homeowners are much more likely to be very (56%) or somewhat concerned (31%) about insurance price increases than those who rent (37% very, 38% somewhat). And, while a majority of homeowners are very concerned about this risk, there are some key differences across regions and demographic groups. Homeowners in Los Angeles (62%) and the Inland Empire (59%) are more likely than residents in Orange/San Diego (51%) and the Central Valley (49%) to be very concerned about rises in insurance prices due to climate risks (56% San Francisco Bay Area). Older homeowners (aged 45 and older) are much more likely than homeowners under 45 to be very concerned. Seven in ten homeowners earning less than $40,000 (70%) are very concerned, compared to far smaller majorities of higher earners (52% $40,000-$79,999; 57% $80,000 or more).
Among California adults who are very concerned about home insurance costs increasing due to climate risks, 44% report being affected by extreme weather in the past two years (compared to 35% of all adults), and about three in ten (29%) have considered moving to a different home to avoid the impacts of climate change (24% all adults). An overwhelming majority (77%) of this group say global climate change is currently having at least some effect on their local community (67% all adults).
About eight in ten Californians are at least somewhat concerned about increases in the frequency and severity of droughts (82%), heatwaves (79%), and wildfires (82%) due to climate change. These and other climate risks have the potential to negatively impact home insurance stability and affordability. Stay tuned as the PPIC Statewide Survey continues to track Californian's environmental and economic concerns.