Homeowners in Gulf Coast states are facing a tightening home insurance market marked by soaring premiums, rising foreclosures, and growing coverage gaps, according to new findings from the Insurance Fairness Project.
The data points to a worsening crisis in Louisiana, Florida, Texas, and Georgia – regions frequently impacted by hurricanes and other extreme weather events.
A report from the Consumer Federation of America shows significant premium increases between 2021 and 2024: 34% in Louisiana, 29% in Florida, 24% in Texas, 20% in Georgia, and 7% in Alabama.
Between 2021 and 2024, homeowners insurance premiums across the US rose by an average of 24%, according to national data compiled by the Consumer Federation of America.
The total financial impact on American households amounts to approximately $21 billion in additional insurance costs during that period, highlighting that the affordability issue extends beyond the Gulf Coast, though it is more acute there.
Analysts say inflation, rising construction costs due to tariffs, and a reduction in federal disaster assistance are compounding the issue. At the same time, insurance providers are reducing their exposure to climate-related risk. Some companies are cancelling policies outright, while others are withdrawing from state markets.
In Louisiana, 11 insurance companies became insolvent following severe storms in 2023, resulting in thousands of unpaid claims. Ten additional companies have exited the state since.
Similar pullbacks are occurring in Florida, Texas, and Georgia, leaving policyholders with limited coverage options. When private insurers retreat, residents often turn to state-backed insurers of last resort, such as Louisiana Citizens. However, those policies tend to be more expensive and can be financially unstable, the report said.
Recent analysis from First Street estimated that climate-related foreclosures may lead to $1.2 billion in lender losses this year. That figure is projected to rise to $5.4 billion over the next decade.
Florida, Louisiana, and California are expected to account for more than half of those losses in 2025. In many cases, properties remain uninsured for flood damage, as standard homeowners policies exclude such coverage.
This exposure to risk is also affecting mortgage markets, as rising premiums, coupled with coverage exclusions, push more homeowners into default. Analysts suggest the increased foreclosure activity may further destabilize local housing markets and elevate the risk profile for mortgage lenders. The long-term projection of $5.4 billion in lender losses reflects both the physical vulnerability of properties and the financial stress on borrowers.
Insurance affordability is also weighing on Florida’s housing market, with elevated premiums cited as one reason for declining real estate prices. Broader economic factors are further aggravating the situation, pushing affordable housing further out of reach for many families.
Insurers’ financial practices are also under scrutiny. A Miami Herald report highlighted that Florida insurers distributed $680 million in dividends to shareholders while citing operating losses as justification for rate increases and regulatory changes.
A separate analysis from Weiss Ratings found that Gulf Coast insurers commonly route profits to out-of-state affiliates while pointing to in-state underwriting losses when advocating for premium hikes.
Additional data on claim outcomes shows that insurers are increasingly denying or closing homeowner claims without payment. In 2023, 13 of the largest US property insurers closed between 40% and 70% of 3.9 million claims without issuing any payout.
Nationally, insurers reported $23.5 billion in underwriting losses over the past two decades, offset by $155 billion in gains from investments and other revenue streams. In Louisiana, the gap was even more pronounced: $1.6 billion in underwriting losses compared to $88.3 billion in investment income and other sources – a ratio of $55 earned for every $1 lost on underwriting.
Meanwhile, claim denials are on the rise. In 2024, 41.9% of homeowner claims nationwide were closed with no payment, a steep increase from 25.8% in 2004, according to Weiss. Louisiana’s denial rate exceeded the national average at 44.6%.
These national figures mirror what Gulf Coast homeowners are experiencing, further highlighting how widespread the issue has become. The data adds to concerns that policyholders, particularly in disaster-prone areas, are absorbing higher costs for insurance products that are less responsive when claims are filed.
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