By Cathy Cowan Becker, Responsible Finance Campaign Director
On May 7, Cameron Hamilton, acting administrator of FEMA, told Congress, “I do not believe it is in the best interest of the American people to eliminate the Federal Emergency Management Agency.”
Within a day, Hamilton was out, replaced by Department of Homeland Security assistant secretary David Richardson, who told agency staff, “Don’t get in my way ... because I will run right over you” in enacting an agenda of pushing disaster relief to the states.
That same day, the National Oceanic and Atmospheric Administration (NOAA) announced it would discontinue updating its Billion-Dollar Weather and Climate Disasters database, widely used by insurance companies, city officials, and more.
The database -- which shows an ever-increasing number and severity of natural disasters in recent years -- draws from both public and private data shared by industry and nonprofits, so is not easily replicable.
Public opinion
All of this is the opposite of what the American people want, according to two recent opinion polls by Data for Progress.
One poll conducted in March 2025 for the Insurance Fairness Project found 67% of likely voters across party lines are concerned about increasing extreme weather events, and 74% believe a property insurance crisis will affect them personally. Yet 61% think the federal government is not doing enough to address this crisis.
Another poll in January 2025 found that 67% of likely voters prefer funding public insurance over allowing private insurance to charge higher premiums to cover increasing storm damage. Policies with voter support include:
- Funding disaster prevention and resilience at the community level (74%)
- Paying some costs of home insurance for low- and moderate-income households (71%)
- Creating a national insurance fund to cover damages from extreme weather events (68%)
- Providing home insurance coverage to Americans directly from the federal government (67%).
Likely voters blame the current property insurance crisis most on CEOs of insurance companies (85%), climate change (72%), and inflation (83%) -- but fewer (62%) connect it to the fossil fuel industry driving more frequent and intense storms of the climate crisis.
The data are clear
Thanks in part to the actions of over 5,400 Green Americans, in January the Federal Insurance Office released a trove of zip-code-level data on how climate change has affected property insurance, with reporting on 250 million policies by 330 insurance companies from 2018 through 2022.
Now allied organizations Revolving Door Project and Public Citizen have used this information to create Mapping the Home Insurance Crisis, showing property insurance trends on an interactive map. You can see how metrics such as average premium, average claim amount, and claim frequency change in zip codes across the United States.
The results show home insurance is becoming less available and more expensive across the nation. Nor is the crisis limited to coastal states like California, Florida, and Louisiana – it is spreading across the Midwest into areas once thought to be climate havens.
Another report by Consumer Federation of America analyzes purchased proprietary data to find property insurance premiums have increased an average of 24% over the past three years – an extra $21 billion in price hikes for Americans.
A typical homeowner with a mid-range credit score and a $350,000 home replacement value paid an average premium of $3,303 in 2024 -- $648 more than in 2021.
States with the greatest increase in premiums were Utah (59%), Illinois (50%), Arizona (48%), and Pennsylvania (44%). States with the greatest premium hikes in absolute dollars were Florida ($2,118 increase), Louisiana ($1,775), and Kentucky ($1,426).
Such significant increases in property insurance premiums have ripple effects across the economy:
- Because mortgage loans typically require borrowers to have home insurance, some homeowners may sell their homes or default on their mortgage. A premium increase of $500 is linked to 20% higher likelihood of mortgage delinquency.
- Some homeowners settle for inadequate insurance with high deductibles, less coverage, and more exclusions.
- Some homeowners “go bare” -- meaning they do not buy property insurance. As of 2021, 7.4% or 6.1 million homeowners were uninsured, leaving them one major disaster from losing everything.
- Young people and first-time homebuyers are less able to buy homes, leaving them out of an important pathway to building financial stability.
- Neighborhoods with many uninsured homes see more damaged and vacant properties, leading to a downward spiral of property values and tax base.
Case study: California
Although the property insurance crisis affects the entire country, one of its epicenters is California, where January's climate-fueled wildfires in Los Angeles are estimated to cost over $250 billion. The fallout is impacting both public and private property insurance.
Everyone pays into the FAIR Plan
California’s FAIR (Fair Access to Insurance Requirements) Plan, the state’s public insurance plan of last resort, had already grown by 40% since 2023 with people abandoned by major insurance companies not renewing policies. At the time of the wildfires in January, the FAIR Plan had just $377 million to pay over 4,800 claims.
Unlike private insurance, FAIR plans can raise money by charging private insurers when they are short on funds to pay claims. In February, California regulators allowed the FAIR plan to charge $1 billion from private insurance companies doing business in the state.
However, recent concessions to the industry now allow these private insurance companies to pass on up to $500 million of this cost to all policyholders in the state – meaning everyone will pay, whether they were affected by the wildfires or not.
State Farm seeks emergency rate hike
In 2023 State Farm stopped accepting new applications for property insurance in California; then in 2024 it raised rates by 20%. State Farm is still California’s largest property insurance company, holding 3 million policies or about 20% of the market.
After the Los Angeles wildfires, State Farm received provisional regulatory approval for an emergency rate hike of 17% for homeowners, 38% for landlord policies, and 15% for renters and condominiums. Insurance commissioner Ricardo Lara granted final approval on May 13.
The rate hike means average State Farm policyholder in California will pay $841 more for home insurance in 2025 than they did in 2023, according to a report by Center for Climate Integrity. About 30% of communities will pay $1000 or more, while 5,000 policyholders in six counties will pay over $3,000 more in premiums. In one zip code, 1,700 policyholders will see premiums increase by $7,553, or 72%.
On April 17 the Eaton Fire Survivors Network called for an investigation of State Farm over widespread delays, denials, and unresolved claims, urging state leaders not to approve the rate increase request. “Most people assume that if you pay your premiums, your insurer will be there when disaster strikes,” group leader Joy Chen said. “But for many State Farm policyholders, the fire was just the start of their trauma. Each day since then, their financial and emotional devastation has grown because of State Farm's actions.”
Meanwhile, State Farm is the nation’s second-largest insurance investor in the fossil fuel industry that is driving the climate crisis, with over $20 billion invested in 65 fossil fuel companies. These investments help shore up insurance company profits in years when they pay more in claims than they take in premiums, but they also multiply the problem.
Policy solutions
An issue as large as the climate-fueled property insurance crisis requires policy action. Reports by Consumer Federation of America, Center for American Progress, and Public Citizen make several overlapping policy recommendations, including:
Public funding
- Increase public funding for climate resilience on both the property and community levels.
- Require insurers to consider home hardening expenses in setting prices.
- Create national public reinsurance, or insurance for insurers, that lowers risk for comprehensive coverage of homeowners.
Accountability
- Prevent insurers from passing on costs to consumers while they insure and invest in fossil fuels.
- Strengthen regulatory oversight of rates and underwriting, including non-renewals.
- Require insurers to have adequate reserves.
Data gathering
- Create a national climate modeling tool and establish routine data reporting.
- Model insurance data collection on the Home Mortgage Disclosure Act (HMDA), which requires public disclosure of data on the census tract level.
- Ensure homebuyers and renters know their exposure to climate risks.
Protecting yourself
Unfortunately, an administration pushing disaster relief to the states just before hurricane season is unlikely to implement these policy solutions anytime soon.
Here’s what you can do in the meantime:
- Check out Green America’s Climate Smart Insurance Directory, which lists options in every state for insurance companies that do not insure fossil fuel projects and invest little to nothing in the fossil fuel industry.
- Shop around. Call three independent insurance agents and ask them to quote costs and coverage at regional mutual insurance companies. Different agents work with different companies, so calling more than one will give you a fuller picture of what is available in your area. Regional insurance companies are no more risky than large insurers and could save you money for the same coverage.
- Seek adequate coverage. The quotes you get should cover the cost of rebuilding your home and replacing personal property, as well as temporary living expenses, medical payments, and liability claims. Keep in mind the cost of building materials, furniture, clothing, and electronics is rising.
- Don’t go without. Property insurance protects your investments, not just from natural disasters but also someone else’s negligence. You can cut costs by bundling home and auto insurance, paying in monthly installments, and asking for any discounts such as through AAA or AARP.
- If your policy is canceled, ask for an extension so you have time to shop for new insurance. Ask for a written explanation including any photos or videos. File an appeal if the evidence provided is not accurate. Make any repairs your insurance company asks for, but start shopping right away in case you need to switch.
