New Data Reveal Climate Change-Driven Insurance Crisis is Spreading

Senate Budget Committee's insurance probe reveals that climate change is increasing insurance non-renewals around the country and provides new evidence that a crash in property values may be looming

Washington, D.C.-Today, Senator Sheldon Whitehouse (D-RI), Chairman of the Senate Budget Committee, released a first-of-its kind public dataset and accompanying staff report that expose the scale of the climate change-driven crisis in homeowners' insurance. With this release, the Committee makes publicly available-for the first time-an accounting of insurance non-renewals at the county level from all 50 states and the District of Columbia, covering the years 2018 through 2023.

"Climate change is not just about polar bears and melting icebergs anymore," said Chairman Whitehouse. "It's also about climate-flation bleeding family budgets-with higher costs for insurance, groceries, and health care-and cascading economy-wide shocks. What our new data reveal is that the failure to deal with climate change is also affecting whether families can even get homeowners insurance, which threatens their ability to get a mortgage, which spells trouble for property values in climate-exposed communities across the country. If Republicans are serious about staving off such an economic catastrophe, they must take their hands out of Big Oil's pockets and take climate change seriously. Our economy, our country, and our future are on the line."

This new report is the culmination of an investigation the Senate Budget Committee launched last fall. Over the course of the probe, the Committee obtained national county-level non-renewal data from nearly two dozen companies that collectively account for about 65 percent of the national homeowners' insurance market. The data cover 249 million total insurance policies over the six-year period beginning in 2018 and ending in 2023. While sky-rocketing insurance premiums have been well documented, comprehensive non-renewal data of this scope and magnitude has never been publicly available-until now.

Today, December 18, 2024, at 10:00 am ET, the Budget Committee will hold its final hearing of the Congress, titled "Next to Fall: The Climate-Driven Insurance Crisis is Here-And Getting Worse" to examine the new data.

The Committee focused on non-renewal data because insurance industry experts have warned that spiking non-renewal rates, even if still low in absolute terms, are often an early sign of market destabilization. Across the country, that kind of destabilization can indicate where the next dominoes are beginning to fall.

Key takeaways in the new data:

• Climate change is driving increasing non-renewal rates. The data confirm that the states and counties most exposed to climate-related risks, like wildfires or hurricanes, are among those with the highest non-renewal rates and the highest growth in non-renewal rates.
• Insurance non-renewals are not exclusively a problem for communities typically seen as being on the front lines of climate change. Florida, California, and Louisiana have been seen as the canaries in the coal mine, but the Committee's data make clear that areas such as southern New England, parts of Montana, coastal and inland North Carolina, coastal regions of New Jersey, New Mexico, South Carolina, and even Oklahoma, among others, are not far behind.
• Across the United States, there is a clear positive correlation between rising non-renewal rates and rising premiums-and a similar correlation between annual premium rate changes and non-renewal rate percentage point changes over time-demonstrating that climate change has become a major cost-of-living issue for families across the country.

Background on the Investigation

This Congress, the Senate Budget Committee has held a series of hearings to expose the systemic risks climate change poses to the U.S. economy and the federal budget. Central bankers, economists, insurance industry executives, financial experts, academics, state and local leaders, and others have warned that sea level rise and more intense storms could make more than $1 trillion in coastal real estate uninsurable, and therefore unmortgageable; that more frequent and intense wildfires could result in a similar death spiral for Western property values; and that climate-related losses are making it harder for the insurance industry to price risk, which has already led to skyrocketing premiums and growth in non-renewals.

Given the economy-wide harms from widespread uninsurability, the Senate Budget Committee launched an investigation into the 20 largest private-sector insurance companies in California, Louisiana, Florida, and Texas-a total of 41 companies-to request documents and information related to the companies' plans to address increased underwriting losses from climate disasters.

Letters were sent to American International Group, Allied Trust, American Integrity, Allstate, American Family, AmTrust, Applied Underwriters, Auto Club Enterprises, AXA, Berkshire Hathaway, Chubb, CNA, CSAA, Fairfax, Farmers, Florida Peninsula, First Protective, Gulf States, Hartford, Heritage, Homeowners of America, Homeowners Choice, Kemper, Louisiana Farm Bureau, Liberty Mutual, Mercury General, Nationwide, Olympus, People's Trust, Progressive, Security First, Shelter Mutual, Slide, State Farm, SURE, Tokio Marine, Tower Hill, Travelers, Universal Insurance Holdings, USAA, and Zurich.