Climate Change Drives U.S. Home Insurance Crisis, Threatening Financial Stability

Rising natural disasters are straining insurance markets, increasing premiums, and leaving many homeowners unprotected.

Economist Gary W. Yohe warns that the growing frequency of extreme weather events, linked to climate change, is destabilizing the U.S. property insurance market.
Major insurers are withdrawing from high-risk areas like California and Florida, forcing homeowners to rely on state-backed insurers of last resort.
Home insurance premiums have surged nationwide, with rates rising 33.8% between 2018 and 2023 due to escalating disaster risks and repair costs.
Experts predict a ripple effect on financial markets, as uninsurable properties and plunging property values could trigger broader economic instability.
The increasing costs of reinsurance and rebuilding, along with regulatory variations across states, further complicate the insurance landscape for homeowners.