U.S. Home Insurance Becoming More Unaffordable: IRC Report

The U.S. insurance market is facing sustained pressure as premiums continue to rise across the country. The average cost of claims per insured home in the United States has increased at a rate faster than inflation over the past 20 years, according to the latest findings released by the Insurance Research Council (IRC). Dale Porfilio, president of the IRC, highlighted key factors fueling this upward trend, including natural disasters, rising repair expenses, fraud, and growing abuse of the legal system.

The IRC’s newly published report sheds light on the uneven impact of these challenges across different states. In 2022, states such as Utah, Oregon, and Alaska recorded the most affordable rates for homeowners insurance. In stark contrast, Louisiana, Florida, Mississippi, Oklahoma, and Arkansas were listed among the least affordable.

While Florida continues to rank as the second least affordable state, there has been slight progress since 2021. Recent legislative reforms enacted in Florida during 2022 and 2023 have shown early signs of improvement by reducing the volume of property claim lawsuits and encouraging greater participation from private insurers. However, Porfilio emphasized that the full impact of these reforms is not yet evident in the available data.

Industry stakeholders and policymakers are expected to explore these evolving challenges in greater depth at the upcoming Artemis London 2025 catastrophe bond and insurance-linked securities (ILS) market conference. The event is poised to be a significant platform for discussing strategies to navigate rising insurance costs and sustain market stability in the years ahead. – Business Wire