January 15, 2025
ABC 3340 News recently published an article featuring Keith Munsell, Master Lecturer of Strategy and Innovation, discussing how the devastating wildfires in Los Angeles and rising home insurance premiums are exposing ongoing issues within the insurance industry.
Homeowners across the U.S. are facing rising insurance premiums due to increased home values, inflation, and the impact of natural disasters. This is driving up the cost of homeownership and rent, making it harder for buyers and renters to afford homes, especially in states like California and Florida where insurance is required for mortgages. Many insurers are pulling out of disaster-prone areas due to heavy losses, leaving residents with fewer options and higher costs, while some states have created last-resort insurance programs.
“If you’re a renter and the cost of insuring your building goes up, your rent is going to go up. If you are a homeowner or a prospective homeowner, the cost of continuing to own a home is going to rise because your cost of insurance is going to continue to go up. If you’re a buyer in states that have these issues, like Florida and California, it’s impossible to get a mortgage without insurance,” Munsell adds.
Homeowners can reduce risks and control insurance costs by making their properties more disaster-resistant, such as adding fire buffers or elevating homes to prevent flooding. Experts stress that mitigating risks is key to slowing rising premiums.