A group of consumer advocacy organizations want the U.S. Department of Treasury to release pricing data from hundreds of insurance companies so the public can better understand why homeowners insurance has increased so much in recent years.
Releasing the data would also show which parts of the nation are seeing the steepest price hikes and where homeowners are struggling to find affordable coverage the most, officials with Consumer Reports, Public Citizen, Green America and Americans for Financial Reform said this week. The consumer groups said the data, which includes ZIP code level figures from 300-plus insurance companies, is being held by the Treasury's Federal Insurance Office and it needs to be revealed so lawmakers can use it for possible reforms.
“As communities across the country risk losing their insurance, tens of thousands of people are now demanding the Treasury Department release the data it has on this crisis,” Rick Morris, insurance campaigner for Public Citizen, said in a statement. “The Federal Insurance Office should not continue to drag its feet on releasing information vital to understanding this unfolding insurance crisis."
Treasury staffers have “been hard at work analyzing data,” an official told Homes.com.
Homeowners insurance is a financial contract between a homebuyer and an insurance company, where the company agrees to pay out a large sum of money to the customer in the event that their home or items within it are damaged. In exchange for that possible payout, the homeowner pays a monthly amount to the company, known as a premium. The typical homeowner pays $198 a month or $2,377 a year for insurance, according to the National Association of Realtors.
Rising rates
Homeowners nationwide have noticed rising insurance rates — a trend that some experts link to inflation while others blame on climate change that creates more natural disasters. The insurance spikes have been most noticeable for Americans living in disaster-prone states like California, Florida, North Carolina, Oklahoma and Texas.
Homeowners insurance rates grew 9.7 percent during the first nine months of 2024, according to the most recent data available from S&P Global Market Intelligence. Those costs grew an average of 11.3% nationwide in 2023, according to S&P. In most locales, a rise in rates must first be approved by a state's insurance regulatory department.
Large natural disasters have also pushed some insurers — including Allstate, Nationwide and State Farm — to stop writing policies in parts of California and Florida, arguing that covering Americans who live in wildfire, tornado, hurricane or earthquake-prone neighborhoods is too risky. Insurance companies that decided to continue writing policies in those neighborhoods have raised their prices, much to the dismay of homeowners.
The Treasury began collecting homeowners insurance data in October 2022 so the agency could study how natural disasters are impacting the insurance industry and where Americans might find themselves unable to purchase casualty insurance coverage.
“Publishing a nationwide assessment on homeowners insurance based on local-level data across the country is a priority for Treasury,” Mike Martinez, a Treasury spokesman, said in an email. “FIO is on track to publish its report before the end of [President Joe Biden's] term.”
Florida case
In Florida for example, many companies asked regulators for rate hikes, in some cases doubling annual premiums. Before state lawmakers intervened in 2022, nearly every insurer offering residential property coverage in Florida raised rates, reduced their footprint in the state or stopped writing new business, according to the Florida Office of Insurance Regulation.
“Consumers are seeing home insurance rates double from the previous year with no explanation — they hadn’t made a claim and live in areas considered ‘climate-safe’ and nowhere near a flood zone," Alexandra Grose, Consumer Reports senior policy counsel, said in a statement. "Some insurance companies are pulling out of certain regions altogether, leaving customers high and dry.”
Rising homeowners insurance rates make it difficult for families to make ends meet, one advocate said, adding that lenders require households to purchase a policy when they sign up for a mortgage.
“Homeowners pay for insurance because they believe their insurance companies will protect them when disaster strikes," Jessica Garcia, senior policy analyst for the Americans for Financial Reform Education Fund, said in a statement. "Far too often, homeowners end up footing the bill when their insurers unfairly deny claims, raise rates astronomically, and withdraw coverage altogether."
Garcia added, "While climate change is a factor, it is clear that there is more to the story.”