Watchdogs raise red flag over troubling trend in homeowners insurance policies: 'Already reaching a breaking point'

Extreme weather isn't just a coastal problem anymore. In the Midwest, windstorms and tornadoes are driving up insurance costs — and consumer advocates say the industry itself is partly to blame.

What's happening?

According to a recent report relayed by the Chicago Sun-Times, premiums in Illinois jumped about 50% between 2021 and 2024. That's the second-highest increase in the country, with the average policy now costing nearly $3,000 for basic replacement coverage.

Chicago saw a 46% rise in that same time. The driving force? Increasingly destructive weather — and, according to consumer advocates, the insurance industry's own role in the changing climate.

"The insurance industry has a choice. It can continue to fuel the crisis, or it can help solve it," said Mike Litt, consumer campaign director at the Public Interest Research Group Education Fund.

Why are rising insurance costs important?

Here's the issue: Major insurers are investing in dirty energy companies and underwriting new oil and gas projects — and then turning around and raising premiums when those same industries contribute to more extreme storms, fires, and other disasters.

It's a self-perpetuating cycle, and it's hitting homeowners hard.

Carly Fabian, a senior insurance policy advocate with Public Citizen, warned that the ripple effects go beyond price hikes. As premiums climb, insurers are also choosing not to renew policies, even in inland states like Illinois.

That leaves some homeowners without coverage — either because their policies are canceled or because they simply can't afford to keep paying.

"Many consumers are already reaching a breaking point," Fabian said, according to the Chicago Sun-Times.

And the consequences are serious. Dropping insurance can violate the terms of your mortgage and put you at risk of foreclosure. If you own your home outright and can't afford coverage, you're left financially exposed when disaster hits.

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What's being done about insurance costs?

So far, much of the insurance industry's response has focused on resilience — pushing for stronger building codes and local disaster mitigation efforts — without fully addressing its ties to dirty energy.

"How are they going to solve the issue if they can't even use the word?" Fabian continued.

At the end of the day, homeowners are being asked to pay the price for a crisis they didn't create. Unless the industry starts taking responsibility — and regulators step up — the situation will only get worse.

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