California E&S Insurance

The growing instability in the U.S. homeowners insurance markets could lead to a housing crash worse than the 2008 one unless policymakers act fast, the Senate Budget Committee has said. The growing instability in the U.S. homeowners insurance markets could lead to a housing crash worse than the 2008 one unless policymakers act fast, warns the [Senate](https://www.newsweek.com/topic/senate) Budget Committee in a new report. According to the document, released on Wednesday, the growing risk of more frequent and more severe extreme weather events caused by climate change spells trouble for the insurance markets, "threatening mortgage markets and property values" as well. Why It Matters Climate change is disrupting American homeowner insurance markets in a way that's quickly revealing how unprepared the industry is to face this new, unavoidable challenge. If insurers end up refusing to cover properties at risk from climate change, mortgage companies won't lend on them, and prices could plunge. More extreme weather events such as hurricanes and wildfires in Florida, California, and Louisiana have already caused several private insurers to cut coverage in some of these states' most vulnerable areas in the past few years, as they try to avoid paying damages bigger than their profits. All three states have experienced skyrocketing premiums as a result of the decreased availability, adding to the already heavy financial burden shouldered by residents for housing. According to the committee's report, Florida and Louisiana had the highest and second highest average statewide nonrenewal rate in the country in 2023, respectively at 2.99 and 1.8 percent. California was fourth, after North Carolina, with 1.72 percent. The situation has clearly worsened in the past five years. Between 2018 and 2023, the time frame covered by the committee's investigation, the nonrenewal rate had surged by 2.2 percent in Florida, 1.31 percent in Louisiana, and 0.77 in California. The committee has found that there's a clear link between diminishing availability and rising premiums. This dynamic, in turn, is likely to cause instability in the mortgage and property markets, with aspiring homebuyers becoming increasingly unable to afford a home. As insurance is key to obtaining a mortgage, properties affected by surging premiums or left without coverage by fleeing insurers "will become unmortgageable," according to the committee's report. As a result of the increased difficulty of getting a mortgage, property values are likely to drop—with dangerous consequences for the entire U.S. housing market. [https://www.newsweek.com/insurance-crisis-could-spark-housing-market-crash-worse-2008-report-2003540](https://www.newsweek.com/insurance-crisis-could-spark-housing-market-crash-worse-2008-report-2003540)

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  "title": "The growing instability in the U.S. homeowners insurance markets could lead to a housing crash worse than the 2008 one unless policymakers act fast, the Senate Budget Committee has said.",
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