In Vulnerable Areas, Climate Risk Drives Home Insurance Non-Renewals, Not Just Rate Hikes | Insurify

In Florida, Insurify projects the average annual cost of home insurance will reach $15,460 at the end of this year, but rising rates aren't the only things homeowners have to worry about. High premiums reflect high risk, often from natural disasters, but some insurers are pulling business from areas altogether to reduce their loss exposure.

Home insurance non-renewal rates — not just premiums — are climbing in many states, according to a December report by the U.S. Senate Budget Committee. That combination can force homeowners to take on more risk to afford insurance, like increasing their deductibles or reducing certain coverages. That rising financial burden means that, in the case of a significant loss, homeowners may be left without much-needed protections.

Key findings

Home insurance non-renewal rates are rising fastest in Florida, Louisiana, and Hawaii.Climate risk significantly affects the insurance market. In 2024, weather catastrophes were responsible for 97% of insured losses worldwide, according to Munich Re.Rhode Island, Montana, and Wyoming, states that many don't consider on the front lines of climate change, are also experiencing spiking non-renewal rates.State regulations can significantly affect home insurance costs from state to state, keeping rates down or quickly allowing insurers to adjust premiums to match risk.

The 10 states where non-renewal rates are increasing the fastest

Climate change is shifting and increasing financial risk for homeowners and insurers, leaving some underinsured or even uninsured for certain disasters. Reducing home insurance coverage is risky, but some homeowners may find it hard to secure adequate, affordable protections in high-risk areas.

The U.S. Senate Budget Committee report found that the data links climate-related risks to high home insurance non-renewal rates at the county and state levels.1

Florida has the highest statewide non-renewal rate. But data show that the full suite of climate risks, including hurricanes, wildfires, severe convective storms, hail, extreme precipitation, and sea level rise, are "all destabilizing insurance markets." A year before, the 2023 Economic Report of the President mentioned that property insurance against natural disasters is on the front lines of climate change-related risk, and the market is already showing signs of strain in several states.2

The U.S. Senate Budget Committee report confirms the correlation between rising non-renewal rates and increasing premiums. Many areas with high non-renewal rates also have above-average or rapidly rising home insurance rates, according to Insurify's home insurance report.

In short, "[c]limate change has become a major cost-of-living issue for families across the country," the committee report noted.

Source: Non-renewal rate data from a December 2024 U.S. Senate Budget Committee report. Rates and projections from Insurify data and analysis.

1. Florida

Non-renewal rate percent change 2018–2023: 280%Projected home insurance rate increase in 2025: 9%Projected annual cost by the end of 2025: $15,460

Extreme weather events, particularly hurricanes, have caused massive insurer losses in Florida. Last year, insured losses totaled $4.3 billion from Hurricane Milton and $2.4 billion from Hurricane Helene in Florida alone, according to Florida's Office of Insurance Regulation (FLOIR). In 2022, Hurricane Ian caused $22.4 billion in insured losses, mostly to residential property.3

In large part due to climate risk, Florida has the most expensive average home insurance rates in the country, according to Insurify data. "Spiking" home insurance non-renewal rates between 2018 and 2023 mean Citizens Property Insurance Corporation, Florida's state-backed insurer of last resort, experienced surging policy counts as homeowners failed to find coverage on the traditional market.4

Florida has also slowly been "depopulating" Citizens policies (moving them to the standard market) over the last year and a half. That indicates the market is stabilizing, and insurers have experienced financial gains in 2024, according to S&P Global.5 But that could be because homeowners are taking on more risk to afford insurance and maintain a mortgage.

Grant programs like the My Safe Florida Home Program are available to Florida homeowners wanting to fortify their homes against weather damage, which can also lead to insurance savings.

2. Louisiana

Non-renewal rate percent change 2018–2023: 267%Projected home insurance rate increase in 2025: 27%Projected annual cost by the end of 2025: $13,937

Louisiana home insurance rates rose by 38% in 2024, and Insurify projects premiums will increase by another 27% in 2025. The state's coastal counties had the highest non-renewal rates in 2023, but counties across Louisiana have experienced significant increases in non-renewal rates, according to the committee report.

High insurer losses have led to higher premiums and insurers leaving the state altogether. Louisiana insurers paid out more than $23 billion after the 2020 and 2021 hurricane seasons, driving some to insolvency, according to the Insurance Information Institute (Triple-I).6

State legislators are trying to attract insurers back to the state. The state ended its "three-year law," which protected long-term policyholders. Insurers can now non-renew up to 5% of their policies for any reason and request permission to non-renew even more. Louisiana is also close to passing a law mandating that insurers offer "stated value" policies to homeowners without a mortgage, allowing them to buy insurance for less than their dwelling cost.

Louisiana homeowners are eligible for up to $10,000 in grants to upgrade or repair their roofs through the Louisiana Fortify Homes program, which may reduce insurance costs.

3. Hawaii

Non-renewal rate percent change 2018–2023: 216%Projected home insurance rate increase in 2025: 17%Projected annual cost by the end of 2025: $1,808

Insurify projects Hawaii home insurance costs will increase from $1,548 to $1,808 by the end of 2025 as insurers continue to account for major losses from two years ago.

In 2023, the Lahaina wildfire in Maui County killed 102 people and caused more than $3 billion in insured losses. Insurers paid out claims costs nearly four times what they made in premiums, according to a P&C Specialist analysis of S&P data.

"The devastating Lahaina wildfire underscored the increasing frequency and severity of wildfire risk, particularly as vegetation patterns, drought conditions, and land use continue to evolve," acting Insurance Commissioner Jerry Bump told Insurify.

The below-average home insurance premiums and high non-renewal rates could indicate insurers are struggling to align rates with risk. In addition to "exiting certain market segments altogether," Bump said insurers are also "adjusting their coverage offerings," indicating homeowners may be taking on increased financial risk.

In May, Hawaii lawmakers passed a bill resurrecting the Hawaii Property Insurance Association and the Hurricane Relief Fund to provide coverage for structures the private market won't insure. The act aims to stabilize the market and has the support of the insurance commissioner's office.

4. South Carolina

Non-renewal rate percent change 2018–2023: 136%Projected home insurance rate increase in 2025: 4%Projected annual cost by the end of 2025: $4,172

Hurricanes and severe storms have caused the most damage in South Carolina since 1980, according to the National Centers for Environmental Information (NCEI). Wildfires are also affecting the state, though the NCEI hasn't yet recorded a billion-dollar loss event due to wildfire.

The cost of reinsurance, which is insurance for insurers, has surged in response to increasing losses in South Carolina and beyond, according to a 2024 report from South Carolina's Department of Insurance.7 The shifting climate risk across the state has led to higher insurance premiums and non-renewal rates, especially along the coast. Hilton Head Island, Charleston, Mount Pleasant, and Myrtle Beach all have average premiums above the state average, according to Insurify data.

Coastal property owners can apply for the SC Safe Home Mitigation Grant Program to retrofit their homes to be more resistant to hurricane damage.

5. Oklahoma

Non-renewal rate percent change 2018–2023: 103%Projected home insurance rate increase in 2025: 8%Projected annual cost by the end of 2025: $8,389

Oklahoma is the third-most expensive state for home insurance, according to Insurify data. Oklahoma faces diverse climate risks affecting various parts of the state, including hail, tornadoes, strong non-tornado winds, and wildfires.

In 2024 alone, severe storms, including 152 tornadoes, caused $24.6 billion in damage, according to the National Weather Service (NWS) and the NCEI. The 2025 season has already been active, with an above-average February through April.8

Since 2000, Oklahoma has accounted for 5% of total U.S. insurer losses from severe convective storms, largely from hail and non-tornado winds, according to Gallagher Re.9 A growing population and increasing number of vulnerable properties are the common themes among the most affected states, which also include Texas (which accounted for 21%), Colorado, Illinois, Minnesota, and Missouri (which each account for 5% to 6%).

Homeowners can get financial assistance to update their homes through the Strengthen Oklahoma Homes program, which provides grants for wind and hail mitigation.

6. Rhode Island

Non-renewal rate percent change 2018–2023: 100%Projected home insurance rate increase in 2025: 4%Projected annual cost by the end of 2025: $2,897

Newport, a particularly wealthy waterfront area, was among the top 100 counties with the highest non-renewal rate in 2023, according to the U.S. Senate Budget Committee report. Newport also has the highest average home insurance premiums in the state, according to Insurify data.

Hurricanes and severe storms have caused the most damage in Rhode Island, according to the NCEI. To support residents who can't find coverage on the standard market, Rhode Island has had a FAIR Plan since 1968. In 2023, the plan had 13,529 policies, according to Triple-I.10 It was among the top 10 homeowners insurers in the state by market share, according to Insurify's analysis of premium data from Triple-I and the National Association of Insurance Commissioners.

Rhode Island has a strong "weather-related losses" statute that prevents insurers from requiring large deductibles for wind losses unless a hurricane directly strikes the state. It also allows homeowners to avoid a separate hurricane deductible if they make their homes more resilient to weather. A bill moving through the state House would create a grant program to help homeowners fund upgrades.

7. California

Non-renewal rate percent change 2018–2023: 82%Projected home insurance rate increase in 2025: 21%Projected annual cost by the end of 2025: $2,930

Last year, wildfires burned 1.05 million acres and damaged or destroyed more than 2,148 structures in California, according to Gallagher Re. Wildfire losses and increasing risk are undeniably driving non-renewals, the committee report found, but not just in high-risk counties. Some counties with the highest non-renewal rates had a lower wildfire risk index than counties with lower non-renewal rates.

California has been a turbulent market for a while. From 2022 to 2023, seven of the top 12 insurers paused or restricted insurance sales, according to the California Department of Insurance. From 2012 to 2021, home insurance companies had higher loss ratios in California than nationwide.

Average rates have remained lower mainly due to heavy-handed regulation. Since it passed in 1988, Proposition 103 has required insurers to ask state regulators for rate approvals, which can slow down the process of matching premiums to risk. Following the Los Angeles wildfires, insurers sought emergency rate hikes to align them with the increased weather-related risk. For example, California approved a 17% rate increase for State Farm policies.

Homeowners hoping to update their homes can apply for assistance through the ReCoverCA program, which provides grants of up to $50,000 to fund fire-resistant home upgrades.

8. New Jersey

Non-renewal rate percent change 2018–2023: 70%Projected home insurance rate increase in 2025: 6%Projected annual cost by the end of 2025: $1,773

The increase in home insurance non-renewal rates, especially in New Jersey's coastal counties, represents a "significant risk of insurance upheaval," the committee report found.

New Jersey's coastal counties have a generally higher risk index, mainly because hurricanes have caused the most damage, according to the NCEI. Eight counties have a high risk of coastal flooding, more than 10 have a high risk of river flooding, and almost all have a high risk of strong winds, according to the Federal Emergency Management Agency (FEMA). Homeowners in flood-prone areas can apply for financial assistance to elevate their homes.

Wildfires are becoming an increasingly serious threat in areas of New Jersey as drought has led to ideal fire conditions. At least six counties had active wildfires in November, and New Jersey contained a wildfire in May that burned more than 15,000 acres in a heavily forested area. While the cause was an improperly extinguished bonfire, "gusty winds, low humidity, and dry undergrowth" fueled what became "one of the worst fires in the state's history," according to the National Environmental Satellite, Data, and Information Service.11

9. Montana

Non-renewal rate percent change 2018–2023: 67%Projected home insurance rate increase in 2025: 10%Projected annual cost by the end of 2025: $2,433

Montana is proof that non-renewals aren't just a problem for states typically seen as on the front lines of climate change, the committee report found. Home insurance costs show a similar trend: Montana is among the top 10 states where home insurance rates are increasing the fastest, according to Insurify's home insurance report.

Wildfires are Montana's most significant growing climate risk, and they're already causing substantial insurer losses in the northwest part of the state. Four counties have more than $10 million in average annual losses, according to the First Street Foundation.12 In 2023, Montana had its most severe drought in 20 years, according to the Western Fire Chiefs Association. So far this year, Montana has experienced 416 wildfires burning more than 7,300 acres.

In May, the legislature approved a request for a study on Montana's property insurance market. Currently, Montana doesn't have any home mitigation grants directly for homeowners but does offer funding opportunities for communities to improve wildfire resilience.

10. Wyoming

Non-renewal rate percent change 2018–2023: 67%Projected home insurance rate increase in 2025: 4%Projected annual cost by the end of 2025: $4,172

Wyoming is also facing growing wildfire risk. In 2023, five counties had average annual losses above $5 million due to wildfires, and two of those had losses exceeding $10 million, according to the First Street Foundation.

The Wyoming Wildfire Risk Assessment Portal shows medium-to-high risk in much of the mountainous western region, including areas of Teton crowded with multimillion-dollar homes.13 The southeast corner, home to the state capital, Cheyenne, has a concentrated area with high-to-highest wildfire risk. High wildfire risk threatening high property values can significantly increase insurer risk, resulting in higher premiums and non-renewals.

Cheyenne also has a relatively high hail risk index, according to FEMA.

"[W]e're seeing record-breaking catastrophes and the risk going up," Carole Walker, executive director of the Rocky Mountain Insurance Association, told Cowboy State Daily. "So that includes, for Wyoming, wildfire risk or, if you're in a hail-prone area like Cheyenne, hail risk. It's the most challenging property insurance market that we've seen in a generation."

Why natural disasters don't immediately affect premiums

It can take time for insurers to calculate how they need to adjust premiums or shift risk exposure after a damaging event. Companies try to maintain profitability by charging policyholders enough to pay out claims and cover the costs of determining those claims.

New regulations, rate increase requests, and severe weather that occurred in 2023 may not affect homeowners' premiums until a year or two later. Reduced availability of home insurance can also increase costs, as insurers have to align the risk they take on with rates.

States also have different processes for regulating property insurance rates, which can accelerate or delay cost increases. For example, a New York Times investigation found that Oklahoma Insurance Commissioner Glen Mulready has never denied a home insurance rate increase request, leading to higher rates statewide. In California, strict regulation has meant lower average rates but a destabilized market, as many insurers have left because the state is slow to approve rate increases.

Mortgages require insurance, so what happens when properties become uninsurable?

Homeowners are adjusting to the effects of climate risk on costs: 47% of surveyed homeowners with home insurance have either reduced their coverage or considered reducing it due to financial concerns. Of those still with home insurance, 25% have considered dropping it altogether.

The cost and availability of home insurance are deeply tied to the economy because homeowners need it to secure a mortgage.

"[A]s insurance becomes less available, more and more affected properties will become unmortgageable," the committee report states. "Because the greatest source of wealth for most Americans is their homes, declining property values will erode household wealth."

Climate risk could cause "economic shocks" on the scale of the 2008 financial crisis and the COVID pandemic, the report noted. But the situation could become even worse, because the "physical risks of climate change make a similar recovery unlikely: a home too endangered to insure will only become more endangered."

Yet, despite the growing value of assets in vulnerable areas, development continues in those high-risk locations, First Street wrote in its 2024 National Risk Assessment.

"We talk about the money a lot, but it also comes back to the safety of your family," Hurricane Sandy survivor Doug Quinn told NJ Spotlight News. "Do you want to put your children to bed at night in a home that has been deemed uninsurable because of the risk?"

Methodology

Insurify data scientists used a real-time database of insurance quotes from partner carriers, as well as aggregated rate filings from Quadrant Information Services, to determine average annual rates and rate projections for 2025.

Unless otherwise stated, rates in this report represent the average annual cost of an HO-3 insurance policy for homeowners with good credit and zero claims within the past five years, covering a single-family frame house with the following coverage limits: $400,000 dwelling, $25,000 personal property, $30,000 loss of use, $300,000 liability, and a $1,000 deductible.

Insurify gathered Quadrant rates in representative ZIP codes in the 10 largest urban areas in every state. Statewide costs reflect the average rate for homeowners across these ZIP codes.

The 2025 prices reflect rates as of Jan. 1, 2025. To project how home insurance rates will change in 2025, Insurify data scientists looked at the historical relationship between a state's prior five years of personal home insurance industry-wide loss ratios and how much its average home insurance rates changed the following year. They then projected how much rates will rise or fall in every state in 2025 based on the most up-to-date home insurance loss-ratio data.

To account for the unprecedented damages caused by the Los Angeles area wildfires in January 2025, Insurify data scientists extended California's home insurance loss-ratio timeline to include this event. The state's projection thus accounts for loss-ratio impacts from these fires using estimates of the total insured damages they caused.

This report also includes data from a U.S. Senate Budget Committee staff report published in December 2024, "Next to Fall: The Climate-Driven Insurance Crisis is Here – And Getting Worse." In November 2023, the committee requested information from 41 insurance companies regarding home insurance non-renewal rates for a six-year period from 2018 to 2023. After a year of negotiations, 23 companies responded, representing 65% of the homeowners insurance market in the U.S.

This report also includes insights from a survey Insurify commissioned. The respondents consisted of 1,001 U.S. residents between 22 and 70 years old who own or lease a car. Respondents were asked up to 15 questions about their financial situation and views on the economy, among other topics. The survey fieldwork took place from May 2 to May 7, 2025.

For media inquiries or questions about our study, please contact the author here.