Displaying Home Insurance Cancellation Rates in the U.S.
Here's a reworded and restructured version of the article:
The New York Times unveiled a map revealing the surge in home insurance companies refusing to renew policies across U.S. counties, using data from the U.S. Senate Budget Committee's latest report. With the worsening effects of climate change, disasters such as hurricanes, wildfires, and landslides have pushed insurers to abandon high-risk regions nationwide.
Interestingly, the map shows that the trend of increased nonrenewal rates hasn't just been limited to California and Florida, the traditional hotspots due to natural disasters. Instead, it's spread to Alabama, Mississippi, and the Carolinas.
Take a peek at the map for yourself.
According to research, as climate change increases, insurers are relying on precise climate risk assessments to decide whether they should continue offering coverage in specific areas. If they estimate the risk of loss to be too high, they tend to deny policies more often. And it's not just California and Florida seeing the brunt of this trend, other high-risk regions are experiencing it too.
It's worth noting that the problem isn't isolated to big-named states. In counties with high-value homes, the correlation between climate risk and non-renewal rates is quite significant. Luxury homes, often situated in climate-vulnerable locations, have twice the correlation with policy non-renewals compared to less-valuable homes, even at the county level.
Moreover, the broader insurance market is responding to wildfire risks in other states, as well as other climate-related perils like wind and hail. This has led insurers to tighten coverage in certain markets, raising premiums, limiting capacity, or leaving high-risk areas altogether. Even in less-publicized areas, climate-driven non-renewals are causing a reduction in insurance supply and higher prices for homeowner policies due to the resulting supply-demand imbalance.
In sum, while California and Florida are frequently in the limelight for their massive climate risks and high numbers of non-renewals, climate change is causing a nationwide surge in home insurance non-renewals, particularly in counties with expensive properties and pronounced climate risks outside these two states.
[1] National data from 2018 to 2023 showed a strong correlation between climate risk and increased non-renewal rates for homeowner insurance policies.[2] The insurance market is reacting to wildfire risks in other states, as well as wind, hail, and other climate-related perils, leading to tightened coverage in certain markets, premium hikes, capacity limitations, or abandonment of high-risk areas.
- In light of the worsening climate-change effects, the insurance industry is employing more precise environmental-science data to assess the climate risk in specific regions, with a propensity to deny policies if the estimated loss risk is too high.
- The financial implications of climate change extend beyond California and Florida, as national data from 2018 to 2023 reveals a significant correlation between climate risk and increased non-renewal rates for homeowner insurance policies, not just in traditional hotspots like these but also in other high-risk regions across the United States.