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The growing void in the U.S. homeowners insurance market: who should bear the rising cost of climate change? | npj Climate Action

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Homeowner insurance is a cornerstone of modern society. It underpins broader housing markets, provides financial security for families and individuals, and is a source of resilience for communities recovering from disasters. However, climate change and urban development in hazard-prone areas are undermining this critical institution, forcing private insurers to retreat from high-risk regions and leaving homeowners in the lurch precisely when they are most in need of coverage. This perspective explores the cascading effects of this crisis and advocates for a multi-faceted set of reforms that address three interrelated problem domains—enhancing innovations in pricing and underwriting, improving transparency of data and risk assessment practices, and bolstering resilience of the built environment—to ensure sustainable protection for the future.

Introduction In late 2024, Hurricane Helene made landfall on Florida’s west coast as a formidable Category 4 storm, unleashing not only strong winds and deadly storm surge on beachfront areas but also swiftly penetrating inland to affect communities in Georgia, North Carolina, South Carolina, Tennessee, and West Virginia. The hurricane’s intense rainfall led to unprecedented dam failures and landslides, particularly in the mountainous regions of North Carolina—areas not prepared to handle the impacts of tropical cyclones and/or their remnants1. The start of 2025 featured multiple major…

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