Smoke floating on us from Canadian wildfires can affect our health
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As homeowners’ insurance becomes more expensive, many Americans choose to go without it.
Released in May 2024, the 2024 US Federal Reserve Economic Welfare for US households, is the latest analysis documenting this trend. Nationwide, 7% of all homeowners in a survey of more than 12,000 respondents were uninsured, and the report found some geography-based inconsistencies.
When asked why they didn’t have homeowners’ insurance, 43% said they couldn’t afford it, and 19% said they were “not worth the cost.” And respondents with fewer financial resources were most likely to go without insurance. None of the approximately 10 people with incomes under $25,000 were made in their homes only three homeowners or assets.
The Fed’s findings are tracked almost accurately in a report published in early 2024 by the nonprofit Watchdog Group Consumer Federation. Approximately 7.4% of American homeowners are reported to be uninsured, representing 6.1 million homes.
“Homeowners who make revenues under $50,000 a year are generally twice as likely to have a shortage of insurance compared to homeowners,” the CFA author wrote, adding that 22% of Native American homeowners, 14% of Hispanic homeowners and 11% of black homeowners are not covered by insurance.
The findings are of concern, the report adds. This means that their owners “are at risk of losing their homes in the face of constantly escalating climate disasters and storms.”
More recent research suggests that the threat may be even more severe. An analysis from data analytics provider First Street, released in May 2025, found a direct correlation between insurance shortages and foreclosures. But the First Street findings also show that it is not just a painless uninsured home, but also a wider community as a whole.
When a storm hits and homeowners fall into delinquency, tax revenues for local government services such as transportation are reduced and demand is reduced. A home may not be abandoned or maintained, and the value of an undamaged home may increase more slowly or decrease completely.
Still, there is a good reason why millions of homeowners say insurance is too expensive for them. Data from the 2025 CFA shows that in 2024, typical homeowners of a home with a midrange credit score and an exchange value of $350,000 faced an average premium of $3,303 – $275 per month.
These numbers continue to grow. First Street shows that premiums began to surge around 2013. As of 2022, insurance costs accounted for more than 20% of typical mortgage payments, tripling roughly to tripling the 7-8% that was compensated for in the decade or so before 2013.
Since 2019, foreclosures have been inscribed in parallel with insurance costs, First Street shows. “One of the proven things to prevent foreclosures is that it’s become so expensive that it causes foreclosures,” the group said.
To combat the problems, the CFA has some recommendations. The group believes that ensuring insurers publish their annual data on homeowner insurance underwriting, pricing, coverage and claims will be a useful start by increasing the industry’s transparency.
The CFA also recommends investing federal and state dollars in the resilience of a home, requiring insurers to charge lower premiums for homeowners who reduce the climate risks of their homes.
“The fast-growing pace of premiums is becoming increasingly unsustainable,” the CFA said.
