Teddy Mars from Louisiana, faced with non-renewal of his policy, found himself paying more for insurance than his mortgage.
A home insurance crisis is wreaking havoc on American families, leaving them grappling with skyrocketing premiums
In desperation, he withdrew $12,000 from his retirement fund, a move that strained his finances due to a home insurance crisis. With a son in high school, the idea of relocating is daunting, and the sale of his home is uncertain due to insurance concerns.
This home insurance crisis mirrors a growing trend across the nation. Climate disasters, coupled with inflation and increased accidents and thefts, are driving an affordability crisis in home and car insurance. A recent NerdWallet survey reveals that 3 in 5 homeowners report a surge in premiums over the past year. Additionally, about 1 in 10 fear their insurers might withdraw from their state.
In Florida, private homeowners insurance has become so scarce that Citizens, the state-backed “insurer of last resort,” now tops the list of policyholders. Some homeowners are even opting to forego insurance, particularly those with annual incomes below $40,000.
The home insurance crisis extends to car insurance
Premiums have surged, with some owners reporting increases of more than 16%. Factors include pricier claims due to extreme weather events, a surge in traffic deaths, and challenges in securing reinsurance. Additionally, friction between insurers and state regulations exacerbates losses, particularly in states like Florida.
While faint hopes arise for potential solutions, such as a U.S. Senate hearing and signs of inflation control, for many Americans living paycheck to paycheck, these offer little comfort. To navigate this crisis, experts suggest shopping around for insurance, seeking advice from independent agents, and adjusting coverage sensibly. Proactive maintenance of homes can also prevent coverage denials, and research before purchasing a new property can avoid unexpected policy expenses. Finally, allowing insurance to lapse, though tempting, can lead to even higher premiums in the future.