Homeowners Face 21% Insurance Premium Increase, Climate Change Cited as Major Factor

Homeowners insurance premiums have increased by 21% from May 2022 to May 2023, with experts attributing this rise to an increase in severe weather events linked to climate change. This surge in premiums, as reported by Policygenius, has left consumers facing unexpected costs at renewal time. The higher costs faced by insurers due to catastrophic weather events are being passed along to consumers, contributing to the significant rise in premiums.

Despite this increase, the exact impact of climate risk on insurance premiums remains unclear. Insurers do not typically share detailed data on individual homeowner premiums and associated risks, making it difficult to gauge how climate risk is factored into policy pricing. The lack of transparency in data complicates efforts to understand and predict future premium trends.

In response to escalating risks, some insurers have stopped offering new policies in high-risk areas, forcing homeowners to turn to state-run insurance programs. These programs, while providing a necessary safety net, often do not offer the same level of coverage as private insurers. This trend of rising premiums and limited insurance options poses a significant challenge for existing homeowners, particularly in states prone to natural disasters.