Home Insurance

Patrick Cooley at WP:

One 2023 estimate, released by the industry group Insurance Information Institute, concluded that 12 percent of homeowners had no insurance in 2022, up from just 5 percent in 2019.

Another more recent study, released by the Consumer Federation of America this past March, reported a lower share of uninsured — 7.4 percent — but that estimate is based on 2021 data from the American Housing Survey, which the Census Bureau conducts every two years. The organization is certain to revise that share upward once 2023 numbers come out, said the CFA’s director of housing, Sharon Cornelissen.

Most uninsured homeowners are those who have paid off their mortgage and are no longer required to have insurance. Among those who own their home outright, the CFA estimates roughly 14 percent are uninsured, with low-income and minority homeowners especially at risk. Among mortgage holders, only 2 percent opt to go without coverage.

Experts say this trend is driven by the escalating threat of climate change — which has forced insurers  to make larger and larger payouts — and skyrocketing housing prices. Both trends are pushing the cost of policies up. On average, home insurance policies rose 11.3 percent in 2023, according to S&P Global.

Compounding the problem, some insurance providers, driven by rising payouts, are pulling out of disaster-prone areas — leaving former policyholders with fewer and more expensive alternatives.