Homeowners struggle as emerging threats drive up insurance prices across US: 'Premiums have really accelerated a lot'

Across the U.S. and throughout the world, natural disasters are getting more frequent and more severe. During times like these, you need your homeowner's insurance more than ever. However, that's getting harder and harder to hold on to. A new report from NerdWallet revealed that homeowners insurance is getting more expensive across the country, Scripps News reported.

What's happening?

NerdWallet conducted a survey that showed that 54% of American homeowners had their premiums increase in the past year. Of those, 32% said extreme weather events were the cause.

NerdWallet home and mortgage expert Holden Lewis agreed, per Scripps News. "You have more wildfires and dry areas," he said. "And you're having more wind damage, hail damage, and flooding in other parts of the country. That's why premiums have really accelerated a lot."

Lewis also noted the increased number of homes as a factor. "If you're insuring 100,000 houses and then a whole bunch of houses are built, the next year you're ensuring 110,000 houses," he said. "That means you have 10% more exposure if you are an insurance company. And so this is something that insurance companies are really weighing."

Industry models of risk are changing, too. "The industry is switching from looking at historical data to set their premiums to predictive data," said Lewis. "That's another element that is increasing insurance premiums."

Why is the increased price important?

Few of us can afford to pay increased insurance prices, especially those in the hardest-hit areas with the largest cost increases. Many homeowners are being priced out of insurance, which can mean being priced out of moving or buying homes, or simply living with unacceptable risk.

All of these problems are caused by the increasing temperature of the Earth, which leads to a less stable climate. Storms get more intense, droughts and flooding become more likely, and wildfires rage. This doesn't happen at random — pollution caused by humans is raising the Earth's temperature.

What can I do about rising insurance costs?

Scripps News recommended shopping around every few years for the best deal in insurance and relying on the services of an independent agent. There are also measures you can take to protect your home from risk, which may lower your premiums.

"Another thing, frankly, is to move, you know, and I think that some retirees actually might consider this," Lewis said.

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