For many Americans, one of the consequences of climate change is higher insurance premiums. In Homeowners Insurance in an Era of Climate Change, the Brookings Institution maps U.S. Treasury Federal Insurance Office data to show where home insurance is becoming more costly and harder to obtain for millions of Americans.
One way this is happening is through non-renewals of homeowners insurance. A non-renewal occurs when an insurance company decides not to continue a policy once it expires - usually because the property is deemed too risky to insure. This leaves homeowners scrambling to find new coverage, often at much higher prices or through limited options like state-run insurers.
The image above shows, on the left, Fire Hazard Severity Zones in California, side-by-side with home insurance non-renewal rates in the state. The dark blue areas on the Brookings Institution map (on the right) indicate higher rates of home insurance non-renewals. These areas appear to follow the Sierra Nevada mountain range.
The Sierra Nevada is heavily forested and therefore highly prone to wildfires, especially during California’s dry summer and fall seasons. This is clearly reflected in the fire hazard severity zones shown on the left. These maps suggest that insurance companies are significantly less likely to renew policies in high-risk wildfire areas due to the increasing frequency and cost of wildfire-related claims.
The Brookings Institution map also highlights a high rate of home insurance non-renewals along the Atlantic coast. This is likely driven by increased risks from hurricanes and rising sea levels. Interestingly, Florida does not show a particularly high rate of non-renewals on this map. This is largely because many private home insurance policies in the state have already been non-renewed in recent years or shifted to state-run insurers, such as the Citizens Property Insurance Corporation.