Home Insurance Crisis Spreads Beyond Coastal Regions
The struggle to maintain affordable home insurance is affecting areas far beyond those typically associated with natural disasters. Recent research reveals that states in the Midwest and Great Plains are experiencing significant spikes in home insurance premiums.
A study by the Consumer Federation of America found that between 2021 and 2024, average home insurance premiums in Utah jumped 59% to nearly $1,800 annually. Other states experiencing substantial increases include Arizona (48% to over $2,200), Illinois (50% to nearly $2,950), Pennsylvania (44% to nearly $2,000), and Nebraska (35% to $5,127). These figures highlight that the home insurance affordability crisis is not limited to coastal regions prone to hurricanes and wildfires.
“Premiums have been rising faster in Heartland states than coastal states,” said Douglas Heller, director of insurance at the Consumer Federation of America. The research indicates that extreme thunderstorms with wind, rain, and hail are causing billions of dollars in losses across states between the Rocky and Appalachian mountains.
The combination of severe weather events, inflation, and rising rebuilding costs is driving up premiums. This has led some insurance companies to scale back coverage in high-risk areas or drop customers altogether. The consequences are significant, as most Americans require home insurance to secure a mortgage.
JPMorgan’s report corroborates these findings, noting that states such as Colorado, Utah, Nebraska, Iowa, Minnesota, and Illinois experienced some of the largest percentage increases in home insurance costs between 2019 and 2024. Sarah Kapnick, global head of climate advisory at JPMorgan, attributed these increases to “severe convective storms” that have ravaged the Midwest and South.
While climate scientists have established a connection between global warming and the frequency of wildfires, droughts, and hurricanes, the link to convective storms is more complex due to their local nature. However, research suggests that hailstones may become larger due to climate change.
The home insurance crisis is expected to worsen as the planet continues to warm. Since 2013, the United States has recorded 178 billion-dollar disasters, five times the number recorded in the 1980s. To mitigate this, insurers and policymakers are exploring ways to make properties more resilient to extreme weather, such as offering discounts for homeowners who invest in resilience measures.
As the situation develops, the need for comprehensive data on home insurance becomes increasingly important. The Treasury Department and the National Association of Insurance Commissioners have published an analysis of 246 million insurance policies sold between 2018 and 2022, revealing that homeowners in high-risk areas paid 82% more for insurance than those in low-risk areas.
