The nonrenewal data gathered in the Committee's investigation confirmed a correlation between rising nonrenewal rates and rising insurance premiums. (Credit: Brazhyk/Adobe Stock)
In a report released earlier this month, the Committee states it launched an investigation into homeowners insurance market conditions across the U.S. in November 2023 in an attempt to understand the scope of problems facing the industry. The Committee focused on non-renewal data in response to climbing non-renewal rates, which have historically been an early warning sign that the market is destabilized.
Takeaways from the Committee’s investigation include:
- Climate change is what is driving non-renewal rates in the U.S., as areas exposed to the most climate-related risks had the highest rates of non-renewal.
- Southern New England, North and South Carolina and New Mexico, as well as counties in the Northern Rockies, Oklahoma and Hawaii are struggling with high non-renewal rates. The report notes that this data demonstrates that “the full panoply of climate-related effects (hurricanes, wildfires, severe convective storms, hail, extreme precipitation, and sea level rise) are all destabilizing insurance markets.”
- At a county level, the Committee found that in 2023, among counties nationwide with at least 10,000 policies in force, 48 counties in the top 50 of highest non-renewal rates — and 82 of the top 100 counties — were in coastal or low-lying delta areas, high-risk wildfire areas or both.
- The non-renewal data gathered in the investigation confirmed a correlation between rising non-renewal rates and rising insurance premiums.
1. Lake County, California
2023 non-renewal rate: 7.56%2018 non-renewal rate: 1.24%
2. Nevada County, California
2023 non-renewal rate: 6.51%2018 non-renewal rate: 2.3%
3. Barnstable County, Massachusetts
2023 non-renewal rate: 6.39%2018 non-renewal rate: 0.78%
4. Tuolumne County, California
2023 non-renewal rate: 6.1%2018 non-renewal rate: 7.33%
5. Jackson County, Mississippi
2023 non-renewal rate: 5.55%2018 non-renewal rate: 0.32%
6. Tehama County, California
2023 non-renewal rate: 5.29%2018 non-renewal rate: 0.89%
7. Harrison County, Mississippi
2023 non-renewal rate: 5.11%2018 non-renewal rate: 0.35%
8. El Dorado County, California
2023 non-renewal rate: 5.01%2018 non-renewal rate: 2.28%
9. Shasta County, California
2023 non-renewal rate: 4.92%2018 non-renewal rate: 1.05%
10. Collier County, Florida
2023 non-renewal rate: 4.92%2018 non-renewal rate: 0.53%
So, what can be done to counter the rising non-renewals and rate increases that are putting an ever-increasing strain on customers and carriers alike?
The Committee’s advice is as follows: “One thing is certain: unless the United States and the world rapidly transition to clean energy, climate-related extreme weather events will become both more frequent and more violent, resulting in ever-scarcer insurance and ever-higher premiums. This is predicted to cascade into plunging property values in communities where insurance becomes impossible to find or prohibitively expensive — a collapse in property values with the potential to trigger a full-scale financial crisis similar to what occurred in 2008. To avoid such a devastating fate, we must speed the transition to clean energy and eliminate carbon pollution. Climate change is no longer just an environmental problem. It is a looming economic threat.”
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