Lawmakers Scrutinize Rising Insurance Costs Amid Natural Disasters
WASHINGTON (NEXSTAR) – Lawmakers are taking a closer look at the rapidly rising cost of insurance as natural disasters continue to strike communities across the United States. The examination comes as homeowners face financial devastation due to skyrocketing insurance premiums.
Jessica Pyska, a supervisor for Lake County, California, shared her personal experience with lawmakers, recounting the devastating impact of the Valley Fire. “The Valley Fire burned 76,000 acres, nearly 2,000 structures, and claimed four lives,” she said. “I lost my home and most of my community that day.” Despite federal aid and incentive programs helping communities rebuild, Pyska emphasized that the cost of insurance remains a significant burden. “Despite these investments, we continue to be crushed by the insurance crisis plaguing our nation,” she added.
The Senate is now reviewing both home and flood insurance costs, with lawmakers from both parties acknowledging the need for reform. Sen. Elizabeth Warren (D-Mass.) highlighted the issue as a bipartisan concern, stating, “Housing is already too expensive for many Americans, and even if families can afford to buy a home, they then get stuck with whopping insurance bills.” According to the Treasury Department, as of January 2025, premiums in climate-vulnerable areas were 82% higher than those in the least risky regions. Warren further noted that “average home insurance rates across the nation have increased by double digits, 23% overall.”
However, Sen. Tim Scott (R-S.C.) pointed out that overly complex regulations are creating barriers for insurers to operate in certain states. “We must be honest about the multiple factors driving the rise in catastrophic losses – from local mitigation and policy failures to market distortions created by counterproductive regulations,” Scott said. Robert Gordon, Senior VP of the American Property Casualty Insurance Association, warned that insurers may pull back from markets they find unprofitable. “They’re not going to keep putting in new money into states where they’re not able to increase their capital, and they haven’t been profitable enough to attract new capital,” Gordon explained.
While lawmakers agree that the system needs reform to ensure affordability and access, the specifics and timeline for these changes remain uncertain.
