Percentage of Americans without home insurance more than doubles in five years

The Insurance Information Institute recently conducted a study that revealed that the percentage of Americans without homeowners insurance has more than doubled since 2019. Currently, 12% of American homeowners have chosen to go uninsured, compared to just 5% in 2019. The rise of premiums around the world Some of America’s most populous states appear to be excluding many homeowners from the market.

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Not following a homeowners policy is called “going naked” because it leaves homeowners naked against risks like fire, theft or natural disasters. The latest results from the Insurance Information Institute are not only elevated compared to five years ago; they represent the highest percentage of naked American homeowners the Institute has ever recorded.

Mark Friedlander, Director of Corporate Communications at the Insurance Information Institute, expressed concern about the risk to homeowners in an interview with USA Today, saying, “It’s a very concerning trend as catastrophe losses continue to rise. It’s not viable for Most Americans pay out of pocket for a significant loss to their property.”

It’s important to note that many owners don’t want to be naked. According to data firm S&P Global Market Intelligence, home insurance premiums rose 11% nationally last year. It’s an alarming increase, but it doesn’t tell the whole story.

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California, Floridaand Texas are some of the most populous states in America. In the last decade, everyone has been hit by natural disasters, such as hurricanes, fires and landslides. These natural disasters have combined to cause billions of dollars in property damage. The cost of covering claims has become so prohibitive that many of America’s largest insurance companies have stopped writing policies in states with a high risk of natural catastrophes.

The lack of competition in the market will cause prices to rise by itself. However, the increase in the power and frequency of natural disasters (which many scientists attribute to climate change) also contributes to the increase in premiums. A recent USA Today article reports that Floridians pay the highest premiums in the country. So many carriers have left the market that state-owned carrier Citizens Property Insurance is the state’s largest insurer.

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A similar situation exists in California, where the state’s public insurer of last resort was receiving so many applications that its website crashed intermittently earlier this year. For those who are lucky enough to get policies, they have a huge number of exclusions and high deductibles. This is what is causing so many homeowners to “go naked.” They want insurance, but they just can’t find it.

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California homeowner Anjali Tierra’s recent experience with homeowners insurance provides a revealing portrait of the difficulty in obtaining an affordable policy. She told USA Today that she left her insurance company in 2019 after receiving a policy renewal notice increasing her premium from $100/month to $350/month, which she didn’t think she could afford on her fixed income. Since then, she has been unable to find an insurance company willing to cover her at any price.

Tierra told USA Today, “Every year, usually in the spring, I’ll start doing the research again. I’ll randomly pick an insurance company to see if they’ll cover me. And since 2019, I’ve been rejected by every insurance company, big and small.” Now, she runs the risk of a fire destroying her most valuable asset and leaving her with nothing.

Every fire season, she takes every precaution possible to protect her home in the Tehachapi Mountains. She actively keeps bushes away from her house and still has trouble installing ember-resistant vents on her roof. Despite this, it gets stuck on pins and needles every fire season. Tierra knows the risk, but she simply can’t stop it.

She told USA Today: “This is my nest of eggs. I do everything I can to protect my pets and my emotional well-being, but it’s been emotionally draining.” She’s not alone. The scary part of this is that these problems are just beginning. As property values ​​and As climate risk increases, so will insurance premiums and the number of homeowners who “go naked.”

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