Home insurance availability guide for states in crisis (May 2024)

Many insurers have stopped selling home insurance policies or have reduced coverage in disaster-prone states. Find out the latest in our home insurance availability guide.

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Jennifer GimbelSenior Managing Editor & Home Insurance ExpertJennifer Gimbel is a senior managing editor and home insurance expert at Policygenius, where she oversees our homeowners insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

Edited by

Colin LalleyColin LalleyContent Director, Home & Auto InsuranceColin Lalley is the content director for home and auto insurance at Policygenius, where he leads our property & casualty editorial teams. His insights have been featured in Inc. Magazine, Betterment, Chime, Credit Seasame, Zola, and the Council for Disability Awareness.
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Reviewed by

Pat HowardPat HowardManaging Editor & Licensed Home Insurance ExpertPat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

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The U.S. home insurance industry has been in turmoil over the last few years, triggered by high inflation and supply chain issues, an increase in expensive natural disasters due to climate change, and rising reinsurance costs. [1] As a result, many home insurance companies including State Farm, Allstate, and Farmers have stopped writing new policies in specific areas or entire states where homeowners are at too high of risk of filing a claim to insure. And other regional insurers including many in Florida have gone insolvent — leaving many homeowners scrambling to find new coverage.  

To help you stay up to date on which home insurance companies are offering coverage where you live, we created the Home Insurance Availability Guide for States in Crisis.

Home insurance availability guide as of May 2024

Here’s a look at what home insurance companies have completely pulled out of high-risk states, are no longer writing new business in certain states, or have placed restrictions on areas or homes they’ll write policies for. Because things are moving so rapidly, reach out to a Policygenius agent for the most up-to-date guidance on home insurance availability where you live.

What these restrictions on insurance coverage mean

  • Full state closure: This is when an insurer canceled or nonrenewed all active policies and stopped selling new policies in the state.

  • No longer writing new business: This is when an insurer keeps policies currently in force and renews them, but no longer writes new coverage in the state.

  • Partial closure: This is when an insurer is no longer writing new policies in areas of the state at high risk of extreme weather, such as wildfires, hurricanes, or tornadoes.

Why are home insurers leaving states?

Home insurance companies have stopped writing new policies in areas where homeowners are at a higher risk of filing expensive claims caused by damage from extreme weather events such as wildfires, tornadoes, or tropical storms. This has been exacerbated by record-high inflation causing an increase in reconstruction costs — leading to higher claim payouts for insurers. 

In the hardest-hit states, like California, Florida, and Louisiana, extenuating circumstances have exacerbated the crises.

California

In the last decade, California saw the two most destructive wildfire seasons in state history, with record $15.4 billion in losses in 2017 and $13.6 billion in 2018. This left home insurers paying more in losses than the premiums they brought in, leading to higher reinsurance costs for insurers. 

Another reason why we’ve seen an influx of home insurance companies leave California is due to the state’s Proposition 103 law approved in 1988. It requires insurance companies to receive board approval by the insurance commissioner if they want to raise the rate of insurance by more than 7%. [2]

The law also prohibits companies from using updated forecast models to estimate the likelihood of a homeowner filing a claim unless they’re willing to share the model with the public. Since companies are hesitant to do this, they choose to use outdated modeling systems in their underwriting, which estimate risk based on losses over the past 20 years and don't take into consideration the recent increased risk of wildfire damage. 

Learn more >> California’s home insurance crisis — explained

Florida 

Two of the costliest hurricanes in Florida occurred within the last 10 years, including Hurricane Ian which caused roughly $50 billion in insured losses. [3] Like in California, insurers were forced to pay out claims that cost more than the premiums they brought in from home insurance policies. 

Since 2017, 11 home insurance companies have had their reserves completely depleted, causing them to go bankrupt. Some insurers that were able to withstand the heavy losses decided to stop writing new policies completely to avoid even more costly claims.

Another factor that left home insurers fleeing Florida or going insolvent is the record number of home insurance lawsuits the state sees each year. [4] As of 2022, 79% of all home insurance lawsuits over claims filed nationwide occurred in Florida even though the state only makes up 9% of the nation’s home insurance claims. [5]  

These lawsuits are so prevalent in Florida compared to other states due in large part to Florida’s assignment of benefits (AOB) clause in homeowners policies and generous attorney-fee statute. The AOB clause allows homeowners to assign the rights to receive insurance proceeds to a third party, like roofing contractors. 

This has led to corrupt contractors taking advantage of homeowners and insurance companies by filing inflated roof damage claims. When insurers deny these claims or offer a lower payout, these contractors then serve insurers with a lawsuit, knowing their attorney fees are legally required to be paid for by the insurance company. [6]

Learn more >> Florida home insurance crisis — explained

Louisiana

The start of the home insurance crisis in Louisiana can be traced back to three hurricanes that hit the Gulf Coast in 2020, leading to a combined $10.6 billion in insured losses from over 320,000 filed claims. [7] This was followed by Hurricane Ida in 2021 and Hurricane Ian in 2022 that caused a combined $43 billion in insurer losses.

A dozen home insurance companies in Louisiana didn’t have the reserves to pay out these high-dollar claims, forcing them into bankruptcy. Many of those left standing decided to stop writing new policies altogether or limited coverage in hurricane-prone areas of the state like New Orleans.

Learn more >> Louisiana home insurance crisis — explained

What is reinsurance and how does it affect home insurance companies pulling out of states?

Reinsurance is a type of insurance coverage for insurance companies. It helps home insurers pay out high-dollar claims after extreme weather events so they don’t deplete all of their reserves after just one disaster. The more high-risk homes an insurer covers, the higher their reinsurance premiums are. Some states like Florida allow insurance companies to pass this increased cost onto consumers in the form of higher insurance premiums — exacerbating the crisis — while others like California don’t.

How to find home insurance coverage if you live in a high-risk area

While it’s getting harder for homeowners in high-risk areas to find an insurer willing to cover their home, it’s possible if you know where to look.

  • Use an insurance marketplace: Insurance marketplaces like Policygenius partner with dozens of home insurance companies, including those that specialize in high-risk coverage. Work with a licensed agent and have them compare quotes from different insurers to find one who is willing to offer you coverage.

  • Ask if you can make home renovations to mitigate risk: If your insurance company is still writing policies in your area, but their underwriting requirements are stricter, ask if there are improvements you can make to your home that will make you more insurable. This might mean installing fire-resistant roofing or wind-resistant storm shutters to better protect your home against extreme weather.  

  • Talk to your neighbors: If you live in an area at high risk of storm damage, odds are your neighbors are also having trouble finding coverage. Ask around to see if anyone had success with a specific insurance company.

  • Look into surplus lines insurance companies: Also known as excess & surplus (E&S) insurance, surplus lines insurance covers risks that are too high for standard home insurance providers to cover because they’re backed by carriers that aren’t required to be licensed in your state. Because of this, E&S insurers aren’t backed by the state’s guaranty fund in the event of bankruptcy, so these policies are riskier than those available through the standard market. If you decide to consider this option, insurance marketplaces like Policygenius can help you find an E&S insurer in your area.

  • Consider your state’s FAIR Plan: ​​If you’ve exhausted all of the above options and you’re still unable to find coverage, look into your state’s Fair Access to Insurance Requirements (FAIR) Plan. These plans are designed exclusively for homeowners repeatedly denied coverage in the voluntary markets. Because they don’t offer as much coverage as traditional policies, they’re best used in tandem with a difference in conditions (DIC) policy. DIC policies offer liability insurance and additional living expenses protection, broaden what perils or disasters are covered, and fill in other coverage gaps left by the FAIR Plan policy.

FAIR Plan insurance guides by state

As of 2024, 33 U.S. states and Washington, D.C. offer some form of FAIR Plan home insurance. Here are a few guides to FAIR Plan insurance in several states, including high-risk California, Florida, and Texas.

References

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of oureditorial standards.

  1. Office of Financial Research

    . "

    Wind, Fire, Water, Hail: What Is Going on In the Property Insurance Market and Why Does It Matter?

    ." Accessed May 20, 2024.

  2. International Center for Law & Economics

    . "

    Rethinking Prop 103’s Approach to Insurance Regulation

    ." Accessed May 20, 2024.

  3. CoreLogic

    . "

    CoreLogic Analysis Shows Final Estimated Insured and Uninsured Damages for Hurricane Ian to be Between $41 Billion and $70 Billion

    ." Accessed May 20, 2024.

  4. USA Today

    . "

    Another company avoids risky Florida home insurance policies: Here's what caused the crisis

    ." Accessed May 20, 2024.

  5. Office of Florida Governor Ron DeSantis

    . "

    Calling on the Legislature to hold a special session regarding property insurance

    ." Accessed May 20, 2024.

  6. Insurance Information Institute

    . "

    Trends and Insights: Florida homeowners’ insurance crisis

    ." Accessed May 20, 2024.

  7. Houma Today, USA Today

    . "

    Insurance claims from 2020 storms reach $10.6B in Louisiana. Here are the local totals

    ." Accessed May 20, 2024.

Author

Jennifer Gimbel is a senior managing editor and home insurance expert at Policygenius, where she oversees our homeowners insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

Editor

Colin Lalley is the content director for home and auto insurance at Policygenius, where he leads our property & casualty editorial teams. His insights have been featured in Inc. Magazine, Betterment, Chime, Credit Seasame, Zola, and the Council for Disability Awareness.

Expert reviewer

Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

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