NRDC REPORT: STATES MUST ACT TO ADDRESS THE GROWING INSURABILITY CRISIS DRIVEN BY CLIMATE-FUELED DISASTERS

The following information was released by the Natural Resources Defense Council (NRDC):

A new report says millions of Americans are being denied or priced out of homeowners insurance as climate-driven disasters push premiums higher and warns that without state action, the insurability crisis will only deepen. The NRDC (Natural Resources Defense Council) report,An Uninsurable Country: States Must Take Action to Fend Off the Looming Home Insurability Crisis, details the early warning signs that homeowners are being priced out of coverage or losing access to insurance entirely, and outlines practical steps states can take to reduce the underlying risks driving the insurability crisis.

"Insurance premiums are skyrocketing as severe weather and disasters become more frequent and more severe," saidRob Moore, report author and director of Climate Adaptation at NRDC."If states don't address the root causes of escalating risk, we're headed for an insurability crisis. We are already seeing how this crisis is leaving people without a safety net in some parts of the country, undermining housing markets, and causing harm to homeowners and renters alike."

The Insurance Information Institute estimates that the number of uninsured homes in the U.S. more than doubled between 2019 and 2023. An estimated 7% to 13% of U.S. homes are currently uninsured. A separate Consumer Federation of America analysis has found typical homeowners' premiums rose 24% between 2021 and 2024, far outpacing the rate of inflation. At the same time, enrollment in state-created insurers of last resort (FAIR plans) increased by 61% from 1.5 million policies in 2020 to 2.7 million in 2024, signaling growing coverage availability constraints in parts of the country.

"States regulate insurance markets, but they can also determine whether homes stay insurable in the long run," saidAlfonso Pating, NRDC's global finance regulation analyst."State governments can't just wait to respond to premium hikes they should focus on preventing the costly climate losses that drive those premiums up in the first place by making homes more resilient to the climate reality we live in."

The report identifies four warning signs that indicate a state may be slipping toward an insurability crisis:

rising damage from climate-influenced hazards and disasters;

rapidly increasing insurance prices;

rising numbers of uninsured homes due to unaffordability or unavailability; and

rising enrollment in state-created insurers of last resort.

In addition to diagnosing the problem, the report lays out a practical roadmap for state action strengthening hazard-ready building codes, accelerating retrofits that exceed minimum standards, funding resilience and risk-reduction efforts (including requiring insurers to contribute), and modernizing insurers of last resort so they help reduce risk rather than simply absorb it.