Weekly Roundup: Pressure Continues for More Protection From Skyrocketing Home Insurance Premiums Cuts… and Federal Cuts Threaten to Put More Americans at Risk
FOR IMMEDIATE RELEASE
April 18, 2025
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Weekly Roundup: Pressure Continues for More Protection From Skyrocketing Home Insurance Premiums Cuts… and Federal Cuts Threaten to Put More Americans at Risk
Each week, the Insurance Fairness Project is highlighting the latest news stories about the country’s climate-driven insurance crisis.
This week in insurance news, threats to eliminate FEMA and the National Flood Insurance Program (NFIP) raise the specter of hard recoveries caused by insurance gaps after severe flooding in central and southern states. Meanwhile, in California, pressure builds for regulators and lawmakers to protect residents from skyrocketing premiums and slow or insufficient payouts that prevent disaster survivors from putting their lives back together. In Florida, new reports highlight how inadequate insurance is leading to a mortgage “blacklist” on condos.
As extreme storms bring more flooding across the country, residents in states including Indiana, Kentucky, Tennessee, Missouri, Texas, and more are seeing gaps in private insurance.
WDRB Louisville: The persistent rain that hit the area earlier this month wasn't typical, but flooding along the Ohio River is no anomaly. Still, fewer than 1% of people in Kentucky, West Virginia and Tennessee have flood insurance. Many people think they're covered but quickly find out they're not, and it's going to cost them.
The NFIP, a program administered by FEMA that covers over 4.7 million Americans, is at risk of expiring in September. This is alarming lawmakers like Gov. Jeff Landry (LA), who declared a “reckoning”on the state’s insurance crisis.
Rep. Julia Letlow (R-LA): “For many Louisianans, flood insurance is not just a policy—it’s a lifeline. Given the frequent storms and flooding our state endures, I’m a strong advocate for renewing the National Flood Insurance Program and making sure it serves those who depend on it."
Read the Insurance Fairness Project’s full statement on the NFIP, FEMA, and how they play into the insurance crisis.
In California, L.A. fire survivors are calling on CA Insurance Commissioner Lara to reject State Farm’s requested 17% rate hike. Meanwhile, Consumer Watchdog launched a new lawsuit against Lara.
Los Angeles Times: Fire victims on Thursday described the rate hike request as the latest in State Farm’s series of betrayals. “The disaster began with the Eaton fire, but for us, the real trauma began when we filed a smoke damage claim with State Farm,” speaker Wendy Davis said. Davis’ five-bedroom home in Altadena is still covered in toxic soot and ash, 100 days after the wildfire first erupted.
AP News: The lawsuit, filed by Consumer Watchdog in Los Angeles, alleges Insurance Commissioner Ricardo Lara overstepped his authority and violated state laws for allowing for such cost shifting without going through the proper process. Such regulations have never been authorized in California and should have been vetted and approved by the Legislature or other oversight agencies before enforcement, Consumer Watchdog argued. The suit is asking the court to block Lara from approving the requests. [Read Consumer Watchdog’s statement]
Additional resources/background on State Farm:
Axios: State Farm's Titanic-like financial crisis, explained
KQED: The Home Insurance Crisis: A Conversation with Florida
In Florida, new reporting brings more information to light about Fannie Mae’s secretive mortgage blacklist that makes selling certain condos impossible, with inadequate insurance being a top reason why they end up on this list.
Tampa Bay Times: The total number of condo buildings on the confidential database in Miami-Dade, Broward and Palm Beach counties sits at 696 as of March, the data from Allcock Marcus, which obtained it from a confidential source, shows. That’s nearly half the 1,438 condo buildings that Fannie Mae lists as ineligible for its backing in all of Florida.
Resources
Equitable & Just Insurance Initiative: A Guide for State and Local Governments to Protect People Financially in the Lead-up to and Aftermath of Climate Disasters
Specific solutions to protect homeowners, renters, and policyholders in the aftermath of a disaster.
Consumer Federation of America: Overburdened
The Dramatic Increase in Homeowners Insurance Premiums and its Impacts on American Homeowners
Center for Climate Integrity: Premiums on Fire
How State Farm’s California rate hike forces the rising costs of climate disasters onto policyholders
Center for American Progress: Managing the Climate Change-Fueled Property Insurance Crisis
How climate change and escalating insurance costs are widening economic inequality and threaten the already limited supply of affordable housing.
Insurance Fairness Project and Data For Progress: Polling – Voters Want Their Government to Address the Property Insurance Crisis
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The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
