Home Insurance Hit By $15 Billion Loss–Including California, Florida
According to insurance credit rating agency AM Best, “The U.S. homeowners insurance segment suffered a $15.2 billion underwriting loss in 2023, more than double the losses seen in the previous year and the line’s worst underwriting results since at least 2000.”
Many losses were due to population migration to California, Florida, Georgia, North Carolina, Texas, and Washington. The states also accounted for 53% of the growth in America’s population between 2010 and 2020. These states also tend to have severe weather events. Florida storms could cost over $1 billion this year.
Population Shift
Christopher Graham, senior industry analyst at AM Best, commented, “A growing population means an even larger rise in real property development and thus in insured values. Construction in catastrophe-prone areas adds to flood risk. It also increases the risk of wildfires in areas prone to them due to human activity and utility companies.” US wildfires have already burned 1.6 million acres.
Due to the growth of dangerous weather events in these states, the situation will likely worsen for insurers. This may be the primary reason for rate increases in these states, and some homeowners’ insurance companies plan to leave them completely.
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