Extreme weather makes home insurers end some coverages, cut natural disasters from policies

Homeowners across the country in areas prone to extreme weather events due to climate change feel uncertain about property insurance as companies are no longer offering coverage.

At least five large insurers, including Allstate, Berkshire Hathaway and Nationwide, have stopped writing coverages in some regions heavily hit by storms, wildfires and flooding, like California, Florida and Louisiana. Companies are also raising rates and excluding protections from various weather events.

Companies say the upheaval reflects the huge number of claims in recent years, rising costs due to inflation, and the growing risks of further catastrophes.

Home insurance typically covers damages from wind, hail, fire, and floods. Many companies want to remove damages caused by hurricanes, winds and hailstorms from the policy.

Over the past three years, U.S. insurers have disbursed $295.8 billion in natural disaster claims, per Aon, a risk management firm. The first half of 2023 has been the third costliest first half on record. From January till June this year, natural disasters have caused $40 billion in insured losses.