Introduction: The economic costs of climate change

The report finds climate change poses significant and systemic economic risks to the United States, with potential impacts comparable to the 2008 financial crisis. Insured losses from natural disasters now approach US$100 billion annually, up from US$4.6 billion in 2000. Federal economic agencies warn that climate impacts could impair productivity, destabilise financial markets, and trigger abrupt asset revaluations. As physical risks grow, insurance markets, mortgage markets, and household wealth face increasing vulnerability.

Summary of the investigation and methodology

In November 2023, the Senate Budget Committee investigated how insurers are responding to heightened climate risk. It sought county-level data on homeowners’ insurance non-renewals from 41 major insurers, receiving substantive responses from 23 companies representing about 65% of the national market. Data covered 2018–2023 and included non-renewal counts, policy totals, and calculated non-renewal rates. The investigation was prompted by insurer withdrawals, substantial premium increases, and a record number of billion-dollar disasters.

Findings of the investigation

A. Coastal and wildfire-prone areas already suffer from an insurance availability crisis

Analysis shows a strong relationship between climate exposure and non-renewal rates. In 2023, all top ten states by non-renewal rate were coastal or had major wildfire risk. Among counties with more than 10,000 policies, 48 of the top 50 and 82 of the top 100 were coastal, low-lying delta, or high wildfire-risk areas. These regions also saw the steepest increases in non-renewals since 2018. Trends remained consistent across all six years of data.

B. Insurance availability concerns are already beginning to spread nationwide — and it’s getting worse

High and fast-rising non-renewal rates are emerging far beyond traditional risk zones. Inland North Carolina counties—including Mecklenburg, Cumberland, Guilford, and Union—rank among the highest nationally, showing that hurricane-related damage extends well inland. Oklahoma ranked seventh in 2023 and fifth for growth since 2018, linked to more intense convective storms, hail, and increasing wildfire exposure.

Several large counties with moderate 2023 rates recorded sharp multi-year increases, including Newport (Rhode Island), New York County, Berkeley (South Carolina), Summit (Utah), Eagle (Colorado), and Fairfield (Connecticut). In California, counties not classified as high-risk—such as Napa, Kings, San Joaquin, and Stanislaus—still appear among those with the highest non-renewal rate increases. States including New Jersey, Montana, Maine, Washington, West Virginia, and Wyoming show notable multi-year growth, indicating widening geographic exposure.

C. There is a strong correlation between increasing premiums and increasing non-renewal rates

Comparisons with premium data show areas with higher insurance premiums tend to have higher non-renewal rates. Regions with the fastest premium growth from 2018–2023 also saw the largest increases in non-renewals. The report notes insurers may raise prices or withdraw from markets as climate risks escalate.

Conclusion

The report concludes that climate change is already destabilising U.S. insurance markets. Rising non-renewals threaten mortgage access and may depress property values, including in areas not previously considered high risk. The Committee highlights the need for enhanced transparency and continued data collection to monitor market stress and inform policy responses.