Credit: Antonioguillem/Adobe Stock
Some Gen Z homeowners are reducing coverages as the cost of properties and insurance policies increase.
Already in 2025, the average U.S. consumer spends nearly $25,000 per year on household bills, with the median annual income for U.S. households at $80,610. Meanwhile, U.S. homeowners now pay 17.4% more for new insurance policies as factors like inflation, severe weather and reinsurance costs impact the market.
Recently, PropertyCasualty360 spoke with Kimberly Burdi-Dumas, Vice President of InsureTech with DocuSketch, about the growing trend of young homeowners abandoning insurance coverages in the face of rising costs.
PropertyCasualty360: Gen Z is reducing insurance coverages. Why?
Dumas: Some of the main reasons Gen Z policyholders may be reducing homeowners insurance coverage relates to costs and a lack of education. As it stands today, the cost of housing is continuing to increase and policyholders are likely examining where every penny goes to determine the value.
Due to their age and lack of long-term homeownership experience, Gen Z policyholders may view insurance as an “easy cost” to cut when budgets are tight. As a result, they likely view reducing insurance as a cost savings measure and may not understand the impact of this decision until an extreme weather event hits.
Additionally, young homeowners may not have a strong grasp on the value of insurance, signaling a breakdown in Gen Z’s understanding of their policies and what is protected. They may lack the understanding of what minimum coverage includes, as well as the need for additional coverage, from fire insurance to increasing premiums to new, costly purchases that go beyond what an initial policy covers.
If younger generations of policyholders are shopping solely for price rather than cause and effect, they will have coverage, but it will lack the comprehensive measures that best protect homeowners.
PropertyCasualty360: Is there a growing disconnect between anxiety over property damage and the reality of rising insurance costs?
Dumas: We are seeing an increasing gap between policyholder’s understanding on the impacts of property damage and the reality of why costs are rising. As extreme weather events increase, related damages will also continue to rise, in turn creating higher premiums and out of pocket costs.
This disconnect is especially true for Gen Z policyholders, who are likely first time homeowners that may not have experienced an extreme weather event. Due to this, misconceptions exist around how insurance can save time and money throughout the repair cycle, creating the misbelief that insurance is a “nice to have” rather than a necessity for all homeowners.
Gen Z’s lack of education around policies also creates increased insurance costs due to non-extreme weather-related events. For example, do-it-yourself (DIY) projects are increasingly popular, yet mistakes made during the process may not be covered under insurance.
If a policyholder is rewiring lighting and the system needs upgrading to be up to local codes, they may have to dip into their own pocket if they are underinsured. As a result, construction can be halted and create further damages and costs.
PropertyCasualty360: How can the insurance industry address young homeowners’ concerns around cost savings while also ensuring they receive comprehensive coverage?
Dumas: Education is the best strategy to address concerns around cost savings while simultaneously encouraging policyholders to find the best coverage. However, the education piece is often overlooked and policyholders are also unprepared to advocate for themselves during the insurance lifecycle. Proactive communication from both parties can go a long way for both cost savings and comprehensive coverage.
For example, many top carriers offer discounts related to upgrades, such as a new roof or an alarm system, that can help lower premiums on top of bundling. Taking these proactive approaches to discounts ensures short term investments turn into long term savings.
Policyholders must take it upon themselves to let their insurance broker know they’ve completed upgrades and to inquire about potential discounts. On the other hand, insurance carriers can also provide a list of discounts for policyholders heading into renewal season, allowing them the opportunity to save money while also maintaining current levels of coverage without price increases.
PropertyCasualty360: Without insurance coverages, describe the vulnerability for Gen Z?
Dumas: Gen Z faces both financial and property-related vulnerabilities when they consider opting out of insurance or reducing coverage to save money.
Without comprehensive coverage, Gen Z policyholders may very likely find themselves riddled with costly repairs after an extreme weather event that could have been covered by insurance. By passing on the upfront costs to insure their property, Gen Z policyholders may discover larger costs that far surpass any insurance premium down the line.
Additionally, Gen Z may not be aware of the impact that a lack of insurance has with lenders at mortgage companies. Traditionally, mortgage companies require insurance for long-term homeowners, and opting to reduce or eliminate coverage puts Gen Z at a disadvantage that can cause issues with mortgage payments.
PropertyCasualty360: How will technology bridge gaps between carriers and contractors to accelerate claims cycles, ultimately transforming the insurance process from start to end for policyholders?
Dumas: Tools like 360 documentation work to align carriers and contractors by providing a single source of visual truth that both parties trust to move forward. With 360 documentation technology, adjusters, carriers, and contractors are enabled to examine a loss, like a forensic claim, digging deeper into the imaging and aligning on next steps.
Referencing 360 documentation helps eliminate the typical back and forth that often occurs during the adjustment period, so carriers and contractors can accelerate the claims cycle and quickly align on the best path forward. This ultimately benefits the policyholder, as restoration and payouts are both completed in a timely fashion.
Having grown up in restoration, Kimberly saw the extreme highs and lows of the industry, cultivating a desire to make a significant impact and positively change the industry for future generations.
During her tenure, she has affected change in multiple verticals of the industry including restoration, textiles, TPAs, carriers, and is a strategy driver in the claims technology sector.
As the Vice President of InsureTech with DocuSketch, she is committed to impacting the industry through innovation, education, and standardization of systems and processes as a six-sigma green belt.
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