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USA Today
4 days ago
- Business
- USA Today
Rising cost of homeowners insurance is scaring away millions of Americans
Rising cost of homeowners insurance is scaring away millions of Americans Show Caption Hide Caption Smoke drifting into US from Canada wildfires could impact health Smoke from Canadian wildfires has been detected drifting in through Montana, North Dakota and northern Minnesota. As homeowners insurance becomes more expensive, many Americans are choosing to go without it – even as risks that are prevented, or at least mitigated, by insurance coverage increase. The Federal Reserve's Economic Well-Being of U.S. Households of 2024, released in May 2025, is the latest analysis to document the trend. Across the country, 7% of all homeowners in the survey of more than 12,000 respondents had no insurance, the report found, although there were some discrepancies based on geography. When asked why they didn't have homeowners insurance, 43% said they 'couldn't afford it', while another 19% said 'it is not worth the cost.' And respondents with fewer financial resources were among the most likely to go without insurance. Roughly 3 in 10 homeowners with income less than $25,000 or those whose only asset was their home went without. The Fed's findings track almost exactly with a report published in early 2024 by the nonprofit watchdog group Consumer Federation of America. Approximately 7.4% of American homeowners are uninsured, that report found, representing 6.1 million homes. "Homeowners earning under $50,000 per year are twice as likely to lack insurance compared to homeowners in general,' CFA's authors wrote, adding that 22% of Native American homeowners, 14% of Hispanic homeowners, and 11% of Black homeowners have no insurance. The findings are concerning, the report adds, because it means those owners 'are at risk of losing their homes in the face of ever-escalating climate disasters and storms.' See also: Climate risk will take trillion-dollar bite out of America's real estate, report finds More recent research suggests the threat may be even more stark. An analysis from data analytics provider First Street, released in May 2025, found a direct correlation between lack of insurance and foreclosures. But First Street's findings also demonstrate it's not just the uninsured homes that suffer, but the broader communities as a whole. When storms hit and homeowners fall into delinquency, there's less tax revenue for municipal services like transportation and less demand boosting the local economy. Homes may be abandoned or not kept up, and the value of even undamaged homes may increase more slowly or decline outright. Still, there are good reasons why millions of homeowners say insurance is too expensive for them. 2025 data from CFA shows that in 2024, a typical homeowner – with a midrange credit score and a house with a $350,000 replacement value – faced an average premium of $3,303 per year – $275 per month. Those numbers have been growing. First Street has shown that premiums started to surge around 2013. As of 2022, insurance costs made up more than 20% of the typical mortgage payment, roughly triple the 7-8% that they made up in the decade or so before 2013. More: Homeownership used to mean stable housing costs. That's a thing of the past. Since 2019, foreclosures have ticked up in tandem with the cost of insurance, First Street has shown. 'The one thing proven to prevent foreclosures is getting so expensive that it is causing foreclosures,' the group said. To combat the problem, CFA has a few recommendations. The group believes that requiring insurance companies to publicly release data on homeowners insurance underwriting, pricing, coverage, and claims every year would be a helpful start, by making the industry more transparent. CFA also recommends investing federal and state dollars in housing resiliency, and requiring that insurance companies charge lower premiums of homeowners who make climate risk reduction upgrades to their homes. 'The pace of rapidly rising premiums is increasingly unsustainable,' CFA said.
Yahoo
4 days ago
- Business
- Yahoo
Home insurance protects against climate change. But report finds millions are missing out.
In the housing market, homeowners insurance has become the embodiment of the effects of climate change. Over the past several years, more frequent and more expensive severe weather events have strained insurance companies, even as skyrocketing premiums punish homeowners' wallets. Now, new research proves what many observers have assumed but rarely quantified: Insurance does shield homeowners from financial trouble in the wake of weather disasters, but existing guidelines for coverage are nowhere near adequate for the scale and scope of potential perils. Even more concerning, insurance costs may soon become too much for homeowners to afford. More: Homeownership used to mean stable housing costs. That's a thing of the past. The research comes from a report called "Climate, the Sixth 'C' of Credit," released May 19 by First Street, a climate risk financial modeling organization. 'I really wanted to prove that insurance is working, where homeowners have insurance,' Jeremy Porter, head of climate implications for First Street, said in an interview with USA TODAY. To do that, First Street looked at dozens of severe weather events since 2000. In incidences of wildfire and severe wind, few homeowners faced distress. Floods are a different story, however. Homeowners' insurance does not cover flood damage, so any property that's considered at risk of flood needs to carry flood insurance. But FEMA, the federal agency tasked with assessing what parts of the country are at risk, drastically underestimates the number of properties that should be covered, Porter said. First Street reckons there are 17.7 million properties that should be covered by mandatory flood insurance – more than double the 7.9 million that lie in FEMA's 'Special Flood Hazard Areas.' The discrepancy, Porter said, is because FEMA does not account for severe precipitation in its models. The states with the most of these additional properties are Texas, Pennsylvania, California, New York and Ohio. While First Street's analysis found a vast majority of counties across the country has a greater number of properties in a flood risk area than what has been defined by FEMA, the most striking findings are the places where the gap between the assessments is the biggest. For example, Letcher County in Kentucky has about 11.4% of its properties in FEMA's special flood hazard area. First Street puts that figure at 60.6%. That difference of nearly 50 percentage points is the widest margin of any county, according to a USA TODAY analysis of the report's data. Kentucky contains six of the top 10 counties with the biggest gaps between the assessments. Some in Virginia and West Virginia complete the ranking. In two-thirds of the floods First Street examined, uninsured homeowners were found to have experienced so much financial distress that damage from extreme weather eventually led to foreclosures. A foreclosure is the most extreme outcome of housing market distress, but it's also the easiest to track, Porter said. That means that all the various steps along the way – from mortgage delinquencies to defaults to cures – may also be occurring in storm-damaged areas, without being recorded. First Street uses Hurricane Sandy, which battered New York City in 2012, as an example of this phenomenon. There were nearly 400 more foreclosures in the area hit hardest by Sandy, the report shows. The areas hardest hit by Sandy had suffered during the subprime crisis – when some homeowners were charged exorbitant mortgage interest rates – and subsequent recession, and home prices had not yet started to rise again. That's another important component of the foreclosures First Street tracked: areas where home prices are rising tend to avoid falling into distress. But it's important to note that where foreclosures are seen, undamaged properties are at risk just as much as damaged ones are. That's partially because a bad storm will impact a community overall, Porter said – services like transportation will go down, people will be unable to get to work, businesses will stay closed. Insurance costs will also likely rise, and the value of even undamaged homes may increase more slowly. 'It's almost like insurance not only protects the property, but it protects the community in a lot of ways,' Porter told USA TODAY. For all the benefits that insurance can provide, the key challenge is that it's expensive – and getting more so. From 2000 to 2013 or so, homeowners' insurance made up about 3% to 4% of the average monthly mortgage bill for Americans, First Street data show. But premiums have skyrocketed since that time, and now account for over 10% of mortgage payments.'There's an indirect effect of additional cost of homeownership that people didn't expect to have when they first took out their mortgage, which is being indirectly driven up because of the increasing severity and frequency of climate risk,' Porter said. First Street's analysis of homeowner costs found that every 1% increase in an insurance premium is associated with a 1% increase in likelihood of foreclosures. As the researchers write, 'the only thing proven to prevent foreclosure is getting so expensive that it is causing foreclosures.' First Street isn't focused on policy implications in the research report, Porter said, but given the political climate in Washington and the threats to many of the agencies that help Americans rebuild in the aftermath of disasters, it's hard not to draw conclusions. 'Any reduction in resources is only going to exacerbate the problems that we're seeing today,' he said. This article originally appeared on USA TODAY: Home insurance protects against climate change. But millions miss out.
Yahoo
4 days ago
- Business
- Yahoo
Rising cost of homeowners insurance is scaring away millions of Americans
As homeowners insurance becomes more expensive, many Americans are choosing to go without it – even as risks that are prevented, or at least mitigated, by insurance coverage increase. The Federal Reserve's Economic Well-Being of U.S. Households of 2024, released in May 2025, is the latest analysis to document the trend. Across the country, 7% of all homeowners in the survey of more than 12,000 respondents had no insurance, the report found, although there were some discrepancies based on geography. When asked why they didn't have homeowners insurance, 43% said they 'couldn't afford it', while another 19% said 'it is not worth the cost.' And respondents with fewer financial resources were among the most likely to go without insurance. Roughly 3 in 10 homeowners with income less than $25,000 or those whose only asset was their home went without. The Fed's findings track almost exactly with a report published in early 2024 by the nonprofit watchdog group Consumer Federation of America. Approximately 7.4% of American homeowners are uninsured, that report found, representing 6.1 million homes. "Homeowners earning under $50,000 per year are twice as likely to lack insurance compared to homeowners in general,' CFA's authors wrote, adding that 22% of Native American homeowners, 14% of Hispanic homeowners, and 11% of Black homeowners have no insurance. The findings are concerning, the report adds, because it means those owners 'are at risk of losing their homes in the face of ever-escalating climate disasters and storms.' See also: Climate risk will take trillion-dollar bite out of America's real estate, report finds More recent research suggests the threat may be even more stark. An analysis from data analytics provider First Street, released in May 2025, found a direct correlation between lack of insurance and foreclosures. But First Street's findings also demonstrate it's not just the uninsured homes that suffer, but the broader communities as a whole. When storms hit and homeowners fall into delinquency, there's less tax revenue for municipal services like transportation and less demand boosting the local economy. Homes may be abandoned or not kept up, and the value of even undamaged homes may increase more slowly or decline outright. Still, there are good reasons why millions of homeowners say insurance is too expensive for them. 2025 data from CFA shows that in 2024, a typical homeowner – with a midrange credit score and a house with a $350,000 replacement value – faced an average premium of $3,303 per year – $275 per month. Those numbers have been growing. First Street has shown that premiums started to surge around 2013. As of 2022, insurance costs made up more than 20% of the typical mortgage payment, roughly triple the 7-8% that they made up in the decade or so before 2013. More: Homeownership used to mean stable housing costs. That's a thing of the past. Since 2019, foreclosures have ticked up in tandem with the cost of insurance, First Street has shown. 'The one thing proven to prevent foreclosures is getting so expensive that it is causing foreclosures,' the group said. To combat the problem, CFA has a few recommendations. The group believes that requiring insurance companies to publicly release data on homeowners insurance underwriting, pricing, coverage, and claims every year would be a helpful start, by making the industry more transparent. CFA also recommends investing federal and state dollars in housing resiliency, and requiring that insurance companies charge lower premiums of homeowners who make climate risk reduction upgrades to their homes. 'The pace of rapidly rising premiums is increasingly unsustainable,' CFA said. This article originally appeared on USA TODAY: Home insurance costs are rising. So millions choose to go without. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-05-2025
- Yahoo
Shooting leaves one injured between renter and suspect at Fresno apartment, cops say
A man was taken to a Fresno hospital Monday morning after he was shot in an apartment. Police said the shooting happened just before 4 a.m. near First Street and Olive Avenue where the victim was shot in the arm. The victim was taken to a local hospital and is expected to be OK. Fresno police Sgt. Diana Trueba Vega said there was a disturbance between a renter and a suspect when it turned physical. The fight turned into a shooting that left the victim wounded after the suspect allegedly fired one shot, Trueba Vega said. The suspect fled on foot. Anyone with information is asked to call police at 559-621-7000.
Yahoo
20-05-2025
- Business
- Yahoo
Climate Change Is Coming for the Housing Market
The financial toll of climate change isn't just theoretical — it's hitting home, quite literally. According to First Street, a climate research firm, weather-related disasters could drive a 380 percent surge in U.S. foreclosures over the next decade. By 2035, nearly one in three foreclosures could be linked to climate impacts like flooding and wind damage. Who could be the hardest hit? First Street warns that moderate-income households are particularly vulnerable to severe weather damage. Since much of Americans' wealth is tied up in their property values, this trend could lead to financial devastation for many families. The fallout won't stop with homeowners. As climate-driven foreclosures climb, lenders could face losses of $1.2 billion annually by this year, potentially soaring to $5.4 billion over the next decade as they absorb the cost of mortgage defaults. But don't assume this crisis will only affect coastal areas. Here's a closer look at where climate-related foreclosures are expected to rise. According to First Street, U.S. communities most at risk for climate-related foreclosures in the coming years are typically densely populated, high-property-value areas with many underinsured homeowners, often located along the coasts. Florida stands out as a prime example. It's home to eight of the top 10 counties projected to face the highest credit losses from extreme weather. In particular, Duval County, which includes Jacksonville, could see up to $60 million in credit losses — caused by customers or borrowers failing to repay debts or loans — from 900 foreclosures during a severe weather year, based on CBS's analysis of First Street's data. And it's not just the Southeast — further north, Ocean County, New Jersey, could see credit losses reaching $13 million. California is also projected to face billions in losses across the state. San Bernardino County, for example, could incur up to $13 million in credit losses, while Sonoma County might see around $2 million. A similar trend is emerging in the South, where Harris County, Texas, which includes Houston, could face losses as high as $34 million. The financial fallout from climate change won't stop at the coasts. Inland regions like the Mountain West and the Great Lakes are increasingly vulnerable to climate-related credit losses, too. According to First Street Foundation, flooding is a key driver behind rising foreclosure rates in these areas, particularly where homeowners lack flood insurance and are more likely to default on their mortgages. Unlike standard homeowners insurance, flood coverage isn't broadly required. It's mandated only for those with federally backed mortgages who live in FEMA's designated Special Flood Hazard Areas. As of August 2023, just 3.1 million flood insurance policies were active under the National Flood Insurance Program. But the true scale of risk goes far beyond that; FEMA's maps identify about 8 million properties in high-risk flood zones, yet First Street estimates nearly 18 million homes nationwide face substantial flood risk. Why the gap? FEMA's flood maps primarily account for river overflows and coastal storm surges, leaving out a major and growing threat: extreme rainfall. As climate change intensifies, so do rain-driven floods that can hit neighborhoods well beyond the official flood zones. This insurance blind spot has costly consequences. First Street's analysis of 29 flood events between 2002 and 2019 found that homes outside FEMA's designated zones saw foreclosure rates 52 percent higher, on average, than those within the zones. It's a jarring warning sign: Homeowners who think they're safe, or aren't required to carry flood insurance, may be most at risk. Unfortunately, FEMA's flood maps aren't likely to be updated anytime soon. The Association of State Floodplain Managers estimates it could cost up to $11.8 billion to complete new mapping — a price tag unlikely to be met, especially amid federal budget cuts across the board. Given this, experts say the best step homeowners can take is to check whether they have flood insurance. 'If you don't protect yourselves, then when the event does occur, it's completely on you,' Jeremy Porter, head of climate implications at First Street, told CBS. 'You end up having to pay out of pocket and you may go into foreclosure.' The post Climate Change Is Coming for the Housing Market appeared first on Katie Couric Media.
