Natural disasters are affecting US homeowners insurance

Home insurance companies operating in US states where expensive natural disasters have become more common are starting to reconsider how they do business.

A few notable examples:

• In Florida, average home insurance premiums currently stand at $6,000/year – a figure nearly 4x above the national average, and 42% higher compared to last year. Many experts attribute Florida’s increased premiums to more frequent and more costly natural disasters affecting the state since 2020.
• California’s three largest insurers – Farmers, Allstate, and State Farm – either completely paused or greatly limited new home insurance applications starting in late 2022, citing the state’s current laws and high wildfire risks.
• Louisiana saw average home insurance premiums rise 7% in 2021 and 19% in 2022, after the state was struck by four hurricanes over the previous two-year period that caused a collective $23 billion in property damages.

📸 Big picture: US insurers have paid out $295.8 billion in natural disaster claims over the past three years, setting a new all-time record, according to international risk management firm Aon and the American Property Casualty Insurance Association.