National Association of Insurance Commissioners and Federal Insurance Office, Department of the Treasury map |
Whether it's tornadoes, wildfires, torrential rains, flooding or atmospheric rivers, extreme weather has carved a path of destruction across the United States. The collective losses caused drastic increases in home insurance costs, leaving some Americans unable to pay, "threatening what is, for many people, their most valuable asset," report Christopher Flavelle and Mira Rojanasakul of The New York Times.
New government data shows how increasing numbers of Americans have "given up on paying their insurance premiums, leaving them exposed to financial ruin," Flavelle and Rojanasakul explain. "The rising cancellation rates are part of a broader trend captured by the Treasury Department, which analyzed information for 246 million insurance policies issued by 330 insurers nationwide from 2018 through 2022."
How and when home policies get dropped depends on a variety of factors. For instance, some homeowners don't have a bank or lien-holder, so they can take the risk and drop their insurance. When policyholders fails to pay their premiums, their insurance company will cancel their policy for non-payment. Other homeowners lose coverage when their insurance company refuses to renew their policy. Without home insurance, homeowners are exposed to possible financial ruin and homelessness.
The rates of cancellations and nonrenewals "are increasing, and those increases are most pronounced in high-risk areas," the Times reports. "In more than 150 ZIP codes around the country, insurers canceled at least 10 percent of home insurance policies in 2022, the most recent year for which numbers are available because homeowners failed to pay their premiums."
While the new information doesn't explain why homeowners have stopped paying for their insurance, "Nellie Liang, the Treasury Department’s under secretary for domestic finance, said her team viewed it as an indicator of families facing growing financial stress worsened by climate change," Flavelle and Rojanasakul write.
No comments:
Post a Comment