The U.S. Senate & Insurance Non-Renewal Rates

In 2023, the U.S. Senate Budget Committee started taking a deep look at climate change and how it might impact insurance, mortgages and the property markets in coastal areas, and in areas with serious exposure to wildfire.

In December of last year the committee issued a report based on the hearings it held between early 2023 and the end of 2024. Here are some of the committee’s conclusions:

• Climate change is driving non-renewal rates
• Areas with the most climate risks had the highest non-renewal rates
• The PIA Western Alliance states of Hawaii and New Mexico are the most impacted
• Other states and areas impacted are Southern New England, South and North Carolina and Oklahoma
• 48 counties of the top-50 highest non-renewal counties and 82 of the top 100 counties were coastal or in high risk wildfire areas or both
• There is a correlation between non-renewal rates and rising insurance premiums

These are the 10 counties in the country with the highest rates of non-renewals in 2023. The report also notes how the rates have changed between in the five years between 2023 and 2018.

Six of the 10 counties listed are in the PIA Western Alliance state of California.

1. Lake County, California

• 2023 non-renewal rate: 7.56%
• 2018 non-renewal rate: 1.24%

2. Nevada County, California

• 2023 non-renewal rate: 6.51%
• 2018 non-renewal rate: 2.3%

3. Barnstable County, Massachusetts

• 2023 non-renewal rate: 6.39%
• 2018 non-renewal rate: 0.78%

4. Tuolumne County, California

• 2023 non-renewal rate: 6.1%
• 2018 non-renewal rate: 7.33%

5. Jackson County, Mississippi

• 2023 non-renewal rate: 5.55%
• 2018 non-renewal rate: 0.32%

6. Tehama County, California

• 2023 non-renewal rate: 5.29%
• 2018 non-renewal rate: 0.89%

7. Harrison County, Mississippi

• 2023 non-renewal rate: 5.11%
• 2018 non-renewal rate: 0.35%

8. El Dorado County, California

• 2023 non-renewal rate: 5.01%
• 2018 non-renewal rate: 2.28%

9. Shasta County, California

• 2023 non-renewal rate: 4.92%
• 2018 non-renewal rate: 1.05%

10. Collier County, Florida

• 2023 non-renewal rate: 4.92%
• 2018 non-renewal rate: 0.53%

The committee also issued a conclusion and some advice for Congress moving forward.

“One thing is certain: unless the United States and the world rapidly transition to clean energy, climate-related extreme weather events will become both more frequent and more violent, resulting in ever-scarcer insurance and ever-higher premiums,” the report concluded. “This is predicted to cascade into plunging property values in communities where insurance becomes impossible to find or prohibitively expensive — a collapse in property values with the potential to trigger a full-scale financial crisis similar to what occurred in 2008. To avoid such a devastating fate, we must speed the transition to clean energy and eliminate carbon pollution. Climate change is no longer just an environmental problem. It is a looming economic threat.”

Source link: PropertyCasualty360.com — https://bit.ly/3BPLoPU