This article applies to California, where the problem is particularly bad, but it's evident in other states too.
Glenn and Lorraine Crawford paid about $500 a month to insure their home in Agoura Hills northwest of Los Angeles when they bought it in 2012.
The Crawfords say they have little alternative but to pay the bill that arrived last month, which, at more than $44,000 a year, is almost as much as their mortgage bill. The only other insurer willing to cover their home, Lloyd’s of London, quoted them $80,000 a year.
More than a year after infernos tore through Los Angeles County, millions of Californians like the Crawfords are suffering through a home-insurance crisis that has rolled on for years with eye-watering rate increases, canceled policies and rejected claims.
Two of the biggest insurers, State Farm and Allstate, aren’t selling to new customers in the state, despite getting double-digit rate increases approved for their existing policyholders. A third, Farmers Insurance, has committed to cover more homes in fire-prone areas, but only a fraction compared with the drop in its overall number of policies since the crisis began.
The insurance dysfunction has spread to California’s housing market, the country’s biggest and most expensive, with nearly one-in-five real-estate agents reporting a canceled sale last year because of clients unable to find affordable insurance, according to a survey by the trade body California Association of Realtors.
There's more at the link (may be paywalled).
Florida looks like another problem state for insurance.
Slake Counts has made a frightening decision. After the price of his homeowners insurance skyrocketed, the Tampa, Florida, resident has chosen not to renew his policy.
Now, he’s pondering his future, which may include selling his home and leaving the state.
“There may be other options for me at this time in my life that don’t necessitate me continuing to live in Florida or Tampa,” Counts told Tampa Bay 28 ... “I’m not the only one in this boat.”
He might be right. According to Bankrate, Florida is the third-most expensive state for homeowners insurance in the U.S. Premiums in the Sunshine State average out to $5,828 per year ($486 per month) for a $300,000 home, while the national average is $2,424 ($202 per month), as of November. Counts showed Tampa Bay 28 the amount of his 2026 renewal increased to $14,523.
Factors that have made home insurance increasingly unaffordable for many Americans include higher home prices, the cost of building materials and the impacts of climate change — especially in disaster-prone areas like Florida.
It’s no wonder that some insurers are pulling out of certain states, and why some consumers are taking the risk of forgoing coverage. But experts emphasize the risks to those who “go bare” can outweigh the benefits.
Again, more at the link.
Those are scary, scary numbers. We bought our home in north Texas ten years ago, paying a relatively low price for a modest 3-bedroom home, and putting down a 20% deposit to keep mortgage payments affordable. Even so, a quick check reveals we're now paying as much per month to insure our home as we are on the mortgage. The premium has increased fairly sharply over the past two to three years, and seems likely to go up by more than 10% this year - perhaps double that, thanks to weather-related disasters and losses elsewhere in the state.
Most of us can't claim our insurance costs against taxes, and that's part of the problem. When a big conglomerate such as Blackrock buys up thousands of houses to rent them out, it can claim their insurance premiums as a business expense against its taxes, making them that much more affordable. On top of that, it can increase its rental charges to cover what it actually pays. Given the very large discounts such a company can squeeze out of an insurance company that wants its business - an insurance company that it may partially or wholly own, at that - it may be paying only a small percentage of the retail or consumer cost of insuring its houses. Is it any wonder that so many consumers find that rental costs in some areas are actually less than the cost to buy a home?
How have you found your home insurance costs and premiums lately, dear readers? Please let us know in Comments.
Peter
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