Homeowners insurance is a necessity to protect American families' largest assets, especially as natural disasters become more damaging because of the world's increasing temperature. However, just when insurance is needed the most, many insurers are pulling out, leaving owners high and dry. In fact, Newsweek reported that one out of four American homeowners was dropped from their insurance coverage in 2024.

What's happening?

Insurers are getting more concerned about risk, especially in disaster-prone areas like California and Florida. Many are responding by raising prices or even leaving those markets entirely, so that Americans have only more expensive and potentially less secure options left.

Newsweek revealed that premiums have increased for two in three owners, and even among those who have kept their coverage, half are worried they will soon become uninsurable.

This upheaval is taking a toll; many homeowners no longer see insurance as worth the expense, and 31% have considered self-insuring instead, meaning that if a disaster struck, they would be on the hook for all costs. Thirty-four percent also report downgrading their insurance coverage.

"The effects of climate change and inflation are compounding each other," Rob Bhatt, lead insurance analyst at LendingTree, told Newsweek. "An uptick in natural disasters has insurance companies paying to rebuild more homes than normal. … Unfortunately, insurance companies pass these types of cost increases along to customers in the form of higher rates."

Why is the reduced availability of insurance important?

A house is the largest asset that most American families own, and it is necessary for their shelter and safety. Losing a home to a disaster, large or small, is devastating enough, even when the family has the means to rebuild. If they're not insured, they may be left with nothing.

"No one can make you get insurance if you own your home outright," said Bhatt, per Newsweek. "However, going without insurance can leave you in a financial bind if a disaster does strike."

Even those who still have insurance are now paying more for it, which is also a blow to budgets stretched thin by recent economic troubles.

What's being done about the availability of insurance?

Some states, like California, are making alternative insurance options available to residents to help cover the gaps insurers are leaving behind. There are also regulations being discussed to help keep plans available and rates affordable.

Ultimately, the only way to resolve this situation is to address the root cause of these increasing disasters: human-caused rising temperatures due to air pollution. Experts say phasing out dirty fuels and switching to clean energy is the long-term solution.

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