Rising homeowners insurance premiums have forced millions of American property owners to rethink their household budgets over the past two years.
A first-of-its-kind analysis from the National Association of Insurance Commissioners (NAIC) suggests that rising costs may be only one part of a much larger coverage threat.
The NAIC just published a review covering seven years of homeowners insurance data collected by state regulators. The analysis spans 2018 through 2024 and draws on filings submitted by 715 insurance carriers that wrote coverage across the country.
Premium increases on their own are striking, with inflation-adjusted hikes reaching as high as 43% in the West, the NAIC found.
But deeper in the report is a trend that could leave policyholders without coverage, regardless of a consistent history of on-time premium payments.
Company-initiated non-renewal rates have climbed across every U.S. region
A non-renewal occurs when an insurance company chooses not to extend a policy after its term expires, regardless of the policyholder’s payment history.
Across all four NAIC geographic regions, company-initiated non-renewal rates climbed between 96% and 216% during that seven-year span, the NAIC report found.
The steepest increase landed in the West, where non-renewals per 1,000 in-force policies more than tripled during the study period.
The NAIC categorized all of these as company-initiated non-renewals.
About 103 million homeowners insurance policies were active across the country as of 2024, so even a small percentage shift reaches millions, according to the NAIC report “Examining Homeowner Property Insurance Market Dynamics.”
Climate disasters are changing how insurers evaluate property
Peter Kochenburger, a visiting professor of law at Southern University Law Center and an NAIC-funded consumer representative, identified the key driver of the non-renewal surge.
Companies issue non-renewals when they conclude that the risk of maintaining a policy outweighs their profit potential, Kochenburger told CNBC.
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Climate-driven severe weather is the primary force behind that recalculation, because it has increased both the frequency and cost of claims, he noted.
The number of billion-dollar weather disasters increased more than fivefold from 2018 through 2022 compared with the 1980s, after adjusting for inflation, according to Treasury’s January 2025 Federal Insurance Office report, which draws on NOAA data.
A Treasury analysis released through the Federal Insurance Office examined the link between climate risk and non-renewal rates across ZIP codes.
Consumers in the highest-risk ZIP codes faced non-renewal rates roughly 80% higher than those in the lowest-risk zones, according to FIO’s January 2025 report, Analyses of U.S. Homeowners Insurance Markets, 2018–2022.
Those same high-risk communities paid an average of $2,321 per year in premiums, or 82% more than lower-risk areas, Treasury’s data showed.
Claims in those zones averaged about $24,000 per incident compared with roughly $19,000 in the least exposed communities, the report found.
NAIC premium data show how costs have moved in each region
The NAIC analysis drew on data from 715 companies that wrote homeowners coverage in 2024, and premiums varied sharply by region.
Inflation-adjusted premium increases by NAIC region, 2018–2024
- Northeast: 18.3%, averaging about 2.4% per year
- Midwest: 24.7%, averaging about 3.3% per year
- Southeast: 26.5%, averaging about 3.6% per year
- West: 43.3%, averaging about 5.3% per year
Source: An assessment of nationwide state-level data from 2018 to 2024 by NAIC
Claim frequency and severity also rose across every region during that period, with the sharpest increases landing between 2021 and 2024, the NAIC confirmed.
Market conditions differ significantly from state to state because homeowners insurance remains a local product shaped by regional weather exposure, the NAIC emphasized.
Construction costs, claims patterns, and the number of carriers competing in each market also influence what consumers pay and whether coverage continues.
What a non-renewal means and where dropped homeowners can turn
The New York State Department of Financial Services showed that a non-renewal differs from a cancellation because it takes effect at the end of the policy term rather than immediately for a specific cause.
Notice requirements vary by state, ranging from about 30 to 60 days before the policy expires, and most states require a written explanation. In New York, for example, insurers must provide at least 45 but no more than 60 days’ notice.
Amy Bach, co-founder and executive director of the consumer advocacy nonprofit United Policyholders, has advised homeowners to avoid filing small claims that could push them into a higher risk category.
Try your best to save your insurance for big losses you can’t cover yourself. Because every claim could lead you to be in a higher risk category, and could lead you to pay more.
Property owners who exhaust their private coverage options may be able to turn to a Fair Access to Insurance Requirements plan, a state-established insurer of last resort available in 33 states as of October 2024.
Those plans offer narrower protection than standard policies, typically covering fire and several related perils while excluding liability, theft, and water damage.
What the NAIC non-renewal data signals for regulators and the market ahead
The NAIC study represents the most comprehensive national look at homeowners insurance non-renewals, premiums, and market stability that regulators have ever produced.
Scott White, Virginia Insurance Commissioner and NAIC President, emphasized that the report gives regulators and policymakers the data foundation they need for informed decisions.
The NAIC data indicates many carriers across the country have already recalculated which properties they consider acceptable risks, and Kochenburger and other analysts cited in the report expect more shifts to follow.
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