13 hours ago
US homeowners struggle with troubling catch-22 as insurance crisis grows: 'It is not worth the cost'
Homeowners are facing a troubling catch-22 when it comes to property insurance. Rising costs are making the safeguard too expensive for many people, leaving their dwellings unprotected from the severe storms that are driving up the premiums, according to The Daily Jeffersonian.
Intense and more frequent extreme weather events are wreaking havoc on storm-prone areas across the country.
A combination of increasing premiums and nonrenewals is leaving property owners in those areas with few options. The Federal Reserve said that 7% of homeowners surveyed last year went without insurance because "it is not worth the cost," according to 19% of respondents.
It's a problem that has been years in the making. The Consumer Federation of America reported that rates rose 8.7% faster than inflation from 2018 to 2022. Coincidentally, home values in coastal communities are dropping as premiums rise. However, coverage nonrenewal rates are 80% higher in areas hit hardest by extreme weather, per the findings.
The issue isn't limited to the seaboards, as premiums jumped in 95% of ZIP codes in recent years. A "typical" homeowner with property carrying a $350,000 replacement value pays about $275 a month for insurance — an amount that's growing. Rising rates are particularly felt by lower-income households, according to the CFA.
"Homeowners earning under $50,000 per year are twice as likely to lack insurance compared to homeowners in general," per the data.
The rising prices are evidence of how our planet's overheating is impacting almost everyone, either with unhealthy air, lighter pocketbooks, or both. A Zillow survey from 2023 found that 80% of respondents consider climate risks when buying a home.
The National Centers for Environmental Information reported that the number of storms causing at least $1 billion in damage has been increasing since the 1980s, a decade that produced 33 of them. There were 115 in the last five years alone, with values adjusted for inflation.
Increased use and availability of federally subsidized insurance for disasters such as floods can provide vital protection in areas where other providers are not active anymore, according to CBS News.
It's important for anyone considering a move to stay informed on climate topics to prevent a relocation into a dangerous area, such as the expanding Tornado Alley.
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Surprisingly, Bloomberg reported that more Americans are moving into danger zones because of the cheaper home prices.
Using your voice and vote to let lawmakers know that keeping agencies like the National Oceanic and Atmospheric Administration and the National Weather Service fully staffed can ensure that residents have updated data and services to make educated decisions, including about where to live. The agencies were part of the federal budget and staff cuts earlier this year, according to The New York Times and other reports. The Times reported that the NWS has rehired for some positions.
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