The impact of rising house insurance

New Republic -   Health insurance has been a prime example of rising costs in this country. Democrats have regularly put these costs at the center of their messaging, focusing most recently on expiring Obamacare subsidies. But in recent years, due in large part to the skyrocketing rate and scope of climate-related extreme weather disasters, home insurance has become an increasingly salient pocketbook concern, as millions of Americans have seen their rates soar, their coverage shrink, or their communities labeled “uninsurable.”

Nationally, home insurance rates have risen by 58 percent since 2018. In many regions the increases are far higher, and it’s not just coastal states that are suffering. For example, the average cost for home insurance in Nebraska this year is $6,400, a massive burden that’s been driven in large part by the increased destructiveness of hail storms, which are getting worse due to climate change. As one insurance agent in Omaha put it, “It’s just becoming unaffordable in our state, is the new reality.” Renters are affected, too—rising insurance rates for rental properties mean that many renter households may see their already-high rents continue to grow, while the supply of subsidized affordable housing and rent-stabilized housing dwindles.

For many Americans, getting any insurance at all is becoming impossible. Since 2021, at least 36 property insurers in 11 states have canceled more than 1.4 million policies, and many insurers are abandoning parts of the country completely—all while continuing to rake in obscene profits. For example, Progressive reported $8.5 billion in profits in 2024, the same year the company canceled 115,000 policies in Florida and stopped writing new policies in Texas; Allstate raised rates by 34 percent in California last year, while reporting $4.7 billion in profits and awarding its CEO $26.7 million total compensation.

And at the same time that rates are rising and coverage is shrinking, millions of Americans’ property values are falling. According to research published last month, houses in areas that are particularly exposed to hurricanes and wildfires have sold for an average of $43,900 less than they otherwise would have because of climate-induced shocks in the home insurance market. For most Americans, the home is the biggest investment they will ever have—a significant decline in its value can be financially devastating.