U.S. Senator Tina Smith Releases New Report on Solutions to the Home Insurance Crisis

WASHINGTON - Today, U.S. Senator Tina Smith (D-MN), the lead Democrat on the Senate Housing Subcommittee, released a new report, Bold Solutions to the Home Insurance Crisis. It examines the nationwide crisis of rising home insurance costs, the role of climate-change-driven extreme weather events, and policy solutions that would tackle this affordability crisis.

Across the country, Americans are increasingly facing unaffordable home insurance bills or aren't able to access coverage at all. Insurers have significantly increased their rates, pushing up home insurance premiums an average of 45% since 2019. Sixteen years ago, home insurance was much more affordable and cost only 5% of the typical monthly mortgage payment. But these costs have now more than doubled to more than 10% of a typical mortgage payment, even as mortgage costs have also surged.

Former Federal Reserve Chair Jerome Powell emphasized the risk we face in response to Sen. Smith's questioning during a Senate Banking Committee hearing, saying that "If you fast-forward 10 or 15 years, there are going to be regions of the country where you can't get a mortgage" due to insurance companies pulling out of high-risk areas.

Minnesotans have been particularly hit hard by rate increases. Last year, Minnesota home insurance rates increased 34%, which was the largest increase of any state, according to reports.

These problems, Sen. Smith argues, are driven by the growing strength and severity of disasters due to climate change and an insurance industry motivated more by profits than protecting its customers.

To address the problem, Sen. Smith lays out more than two dozen policy options that Washington can consider, ranging from those that lower physical risks for homeowners and communities, to wholesale alternatives to our current, private home insurance system.

You can read the full report HERE:

· Senator Smith's opening letter here

· An executive summary here

"Owning a home has always been part of the American dream. But for too many families today, that dream feels further out of reach than ever before. Without affordable insurance, mortgages may become harder to get, home values could decline and whole communities could face financial ruin. This isn't some distant threat; it's happening right now all across the country. This crisis is the result of several intertwined factors-including the worsening effects of climate change, the realities of our built environment and the structure of our financial systems," said Senator Smith. "This report lays out the facts behind the home insurance crisis. It discusses the role of climate change, shows who is profiting from the status quo and highlights bold solutions that would help keep homeownership within reach."

"The scale of the crisis of insurance availability, affordability, and adequacy mandates ambitious policy solutions," said Moira Birss, Senior Fellow at Climate and Community Institute. "As this comprehensive and invaluable report from Senator Smith outlines, the public sector must forge a new path forward that keeps communities whole and holds private actors accountable."

"Home insurance is a major part of America's affordability crisis. Countless families are shouldering the costs of the climate crisis through increased insurance premiums or lack of coverage. This is already having real-world impacts as disaster survivors struggle to rebuild and recover," said TJ Helmstetter, a spokesperson for the Insurance Fairness Project. "Insurance is supposed to be the safety net when disasters occur, and right now the net is dangerously frayed. Homeowners and renters cannot be the only ones responsible for repairing it, especially when so many of us are barely making ends meet. Senator Smith's report provides insights on avenues to ease costs and create a stronger, more reliable insurance system that manages rising premiums and risks. It also examines solutions to some root causes, including excessive profiteering and accelerating climate change."

"The home insurance availability and affordability crisis is threatening the housing security of families across the United States. While climate change is increasing damages, insurance companies are continuing to profit while playing states off against each other. Federal intervention will be necessary to protect families and head off a full-blown economic crisis, and we laud Senator Smith for her forward-thinking approach on this pressing issue," said Caroline Nagy, associate director for housing at Americans for Financial Reform Education Fund.

"From skyrocketing home insurance premiums to total policy cancellations, families are paying the price for record-breaking heat, severe drought, and devastating flooding. Meanwhile, insurance companies are raking in record profits and pushing the costs onto their customers. Americans deserve solutions now. We appreciate Senator Smith's leadership in bringing much-needed attention to the climate-fueled home insurance crisis and offering real solutions to make housing more affordable," said Mia Logan, Senior Advisor at Climate Power.

"Across the country, survivors of floods, wildfires, hurricanes, and extreme heat are facing a second disaster when they open their insurance bills," said Sierra Kos, Co-Founder and Co-Executive Director, Extreme Weather Survivors. "Rising premiums, reduced coverage, and policy nonrenewals are making it harder for families to stay in the homes and communities they love. We welcome Senator Smith's attention to the growing home insurance crisis and her commitment to exploring solutions that help keep coverage affordable and accessible for homeowners. Survivors need leaders at every level of government to recognize that as extreme weather events become more frequent and costly, insurance is increasingly becoming a housing issue, an affordability issue, and a recovery issue."

Senator Smith has been a champion in the Senate for affordable housing and clean energy policy. She has been the top Democrat on the Senate Housing Subcommittee since 2021 and has a record of proposing and delivering on bipartisan housing solutions, ranging from reforming rural housing programs, improving homeless assistance and access to homeownership, and has made addressing Minnesota's housing challenges a priority as Senator. She was instrumental in securing major climate and energy provisions in the Inflation Reduction Act, including tax credits for clean energy technologies.

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