Category Archives: Affordability

Affordability, Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Hurricane, Insurers and the Economy, Roof Condition, Severe Convective Storm, Tornado, Wind

Storm-Resistant Roof Efforts Gain Ground

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By Lewis Nibbelin, Research Writer, Triple-I

Severe convective storms cost insurers an estimated $46 billion in the first three quarters of 2025, Gallagher Re has reported, marking the third straight year of U.S. claims from these events through September exceeding $40 billion. Total losses from these storms – which include tornadoes, hail, straight-line winds, and drenching thunderstorms – reflect growing impacts from inland flooding and, in particular, the vulnerability of roofs to damage from these storms.

Approximately 70 to 90 percent of total insured residential catastrophic losses arise from roof-related damage, according to Insurance Institute for Business & Home Safety (IBHS) estimates. Though poorly maintained roofs contribute to this finding, outdated building codes exacerbate the risk, leading insurance industry leaders to advocate for widespread adoption of FORTIFIED roof standards.

Developed by IBHS, FORTIFIED standards can reduce severe weather damage in new or retrofitted homes through construction methods like sealing roof decks and anchoring roofs to wall framing using stronger nails. While such standards remain voluntary, Louisiana has modelled the proactive approach needed to facilitate adoption with the recent expansion of its Louisiana Fortify Homes Program, which began offering homeowners thousand-dollar grants to retrofit their houses along these guidelines in 2023, incentivizing roughly 40 percent of the now 10,000 FORTIFIED roofs in the state.

“FORTIFIED roofs are the long-term solution for affordable insurance in South Louisiana,” said state insurance commissioner Tim Temple, noting that his office aims to implement bigger and more standardized insurance discounts for FORTIFIED homeowners to reinforce the state’s already improved insurance rates.

An emerging trend

Though Louisiana became the “fastest-growing state” to adopt FORTIFIED standards, Alabama pioneered incentivizing them through its own Strengthen Alabama Homes program, financed by the insurance industry with more than $86 million in grants since 2016. Designed to enhance community resiliency while also lowering insurance rates, completed retrofits qualify residents for premium discounts ranging from 25 to 55 percent.

A May 2025 study from the Alabama Department of Insurance, in collaboration with the University of Alabama Center for Insurance Information and Research, showcases the program’s success, highlighting that FORTIFIED homes suffered less property damage and fewer insurance claims than homes built using other construction methods when Hurricane Sally made landfall in the state.

“The Center’s Hurricane Sally report doesn’t just quantify the effectiveness of the FORTIFIED program, it clearly demonstrates that homes can be built to survive storms, making them eminently more insurable,” said IBHS CEO Roy Wright. “This report should be a clarion call to communities across the country, urging them to implement Alabama’s multipronged approach to promoting disaster mitigation.”

Insurers answered the call in Oklahoma, North Carolina, and South Carolina, all of which boast similar programs backed by the insurance sector and accompanying premium reductions. Mississippi nearly joined their ranks before state funding for the grant program was suspended earlier this year, though insurance discounts remain available. States such as Florida, Georgia, and Minnesota also offer comprehensive insurance discounts for FORTIFIED properties, with the latter poised to fully replicate a grant program in response to mounting hailstorms.

Addressing cost concerns

While 75 percent of homeowners express willingness to invest in weather-resistant features, only 18 percent have reinforced or replaced their roofs with those materials, a recent Nationwide survey reveals. Grants help lower the cost of entry to FORTIFIED roofs for many homeowners, but it is worth noting the relative affordability of such upgrades, which can cost as little as $500 for a 2,000 sq. ft. home.

Describing the benefits of FORTIFIED standards as “measurable and increasingly essential,” Nationwide Property & Casualty president and COO Mark Berven emphasized the crucial role insurance agents play in raising consumer awareness of these risk reductions and their broad accessibility.

“Our industry needs to remind homeowners they have control in the face of severe weather events,” Berven wrote. “By investing in resilience, they can take an active role in protecting their homes, their valuables and their memories – giving them the peace of mind they’re looking for.”

Learn More:

Why Roof Resilience Matters More Than Ever

Study Touts Payoffs From Alabama Wind Resilience Program

Resilience Investment Payoffs Outpace Future Costs More Than 30 Times

Outdated Building Codes Exacerbate Climate Risk

FEMA Highlights Role of Modern Roofs in Preventing Hurricane Damage

Louisiana Senator Seeks Resumption of Resilience Investment Program

Affordability, Homeowners Insurance, Insurers and the Economy, Market Conditions

Triple-I Chief Economist Testifies on NYC Measure On Short-Term Rentals

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By Loretta Worters, Vice President – Media Relations, Triple-I

Triple-I Chief Economist and Data Scientist Dr. Michel Léonard provided insurance insight to the New York City Council’s Committee on Housing and Buildings as they consider Local Bills 948-A and 1107-A. The measures aim to address New York City’s housing-affordability challenges by expanding homeowners’ ability to earn income through short-term rentals.

Léonard’s testimony focused on helping policymakers understand the protection gaps that can arise when residential dwellings are used for commercial purposes. He began by emphasizing Triple-I’s role as a nonprofit research and education organization, not a lobbying entity.

Many homeowners, Léonard noted, are unaware that standard homeowners’ policies generally exclude commercial activity, meaning hosts who fail to update their coverage may face denied claims, inadequate liability protection, or higher out-of-pocket costs if a loss occurs. Because short-term rentals fall under commercial use, homeowners who rent out their homes — whether occasionally or regularly — may inadvertently operate without appropriate coverage.

Operating a short-term rental typically requires:

  • Notifying their insurer,
  • Adhering to policy terms, and
  • Obtaining short-term rental-specific or commercial coverage.

Committee Chair Pierina Ana Sanchez asked what the cost impact might be for homeowners who must shift to a commercial policy. Léonard explained that, while costs vary, the more pressing issue is that many homeowners are unaware they have gaps in coverage.

This means homeowners, renters, and residents could all face significant financial or liability risks if an incident occurs. These risks are especially complex in multi-unit buildings, where short-term rental activity can affect both an individual unit’s policy and the building’s master policy—potentially increasing premiums and liability exposure for all residents. The result can be large uncovered losses, disputes, or claims that ripple throughout buildings and neighborhoods.

Homeowners insurance in New York City is significantly different from New York State. In written testimony to the New York Senate Committees on Investigations and Government Operations, Insurance, and Housing, Construction, and Community Development on Tuesday, November 18, Triple-I Chief Insurance Officer Patrick Schmid cited data from the Insurance Research Council (IRC), saying New York ranks 29th in its homeowners’ affordability study, with a 2.11 percent ratio of homeowners’ insurance expenditure to median household income. This is a lower percentage than a decade earlier for the state. According to IRC, New York’s homeowners’ insurance expenditures equal 0.39 percent of median.

Insurance in New York City is complicated, influenced by high property values, dense construction, and a challenging legal and claims environment. Rising labor and construction costs also contribute to higher premiums and more severe claims.

Coverage gaps and denied claims, even when policies are applied correctly, can lead to public misunderstandings about insurance. As Allstate CEO Tom Wilson recently noted, trust between consumers and companies is at a “tipping point” and must be reinforced through reliability and clear communication.

With its independent insight, Triple-I gave policymakers a clear understanding of the potential insurance consequences of expanding short-term rentals in residential buildings, helping them make informed decisions that balance affordability, consumer protection, and risk management.

Learn More:

Triple-I Testifies on New York Insurance Affordability

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Insurance Affordability, Availability Demand Collaboration, Innovation

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Affordability, Insurers and the Economy, Market Conditions

Triple-I Testifies on
New York Insurance Affordability

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By Jeff Dunsavage, Senior Research Analyst, Triple-I

New Yorkers – like residents of all U.S. states – have been struggling with rising costs in recent years, including the cost of home and auto insurance coverage. This week, Patrick Schmid, Triple-I’s chief insurance officer, testified to New York lawmakers about why homeowners’ insurance premiums are rising and where New York policyholders stand relative to other states.

“New York’s homeowners’ insurance market is, in fact, functioning well and remains affordable when properly contextualized,” Schmid said in written testimony to the New York Senate Committees on Investigations and Government Operations, Insurance, and Housing, Construction, and Community Development. “While premiums may appear high in absolute dollars, they are relatively average and reasonable as a percentage of household income.”

Citing data from the Insurance Research Council (IRC), Schmid said New York ranks 29th in its homeowners’ affordability study, with a 2.11 percent ratio of homeowners’ insurance expenditure to median household income ratio. This is a lower percentage than a decade earlier for the state. According to IRC – like Triple-I, an affiliate of The Institutes – New York’s homeowners’ insurance expenditures equal 0.39 percent of median home value.

“When a home costs $413,588 and insurance costs $1,602 annually (0.39% of the home’s value), the insurance premium is not necessarily the driver of unaffordability within the region,” Schmid said. “The underlying property cost, and associated replacement costs, are likely a key challenge.”

He compared New York with:

  • Louisiana, with a ratio of 1.18 percent (more than three times New York’s)
  • Mississippi, at 1.04 percent (nearly three times New York)
  • Alabama, at 0.78 percent (twice New York)
  • Florida, at 0.4 percent (1.7 times New York)

“Only 20 states have more efficient insurance costs relative to home values,” Schmid said. “This contradicts the narrative of an affordability crisis in New York’s homeowners insurance market. Our market is delivering coverage at rates that are among the most competitive in the nation when measured against the value of assets being protected.”

New Yorkers face significant cost burdens that are structural and related to a variety of factors outside of insurance, Schmid said.

The fundamental driver of insurance costs is the cost to rebuild homes, most notably:

  • Labor costs: Skilled trades in NY metro areas command premium wages;
  • Material costs: Transportation, storage, and compliance add to expenses;
  • Building codes: Stricter standards increase rebuilding costs but improve long-term resilience and reduce future losses; and
  • Land values: Property values include expensive land that doesn’t require insurance, making the actual structure component even more valuable proportionally.

Schmid cautioned against lawmakers following the temptation to intervene in insurance markets – as some states have attempted to do in recent years — emphasizing that “targeting insurance premiums would address a symptom rather than the cause, potentially destabilizing a well-functioning, competitive market without improving overall housing affordability for New York residents.”

Learn More:

Triple-I Brief Explains Benefits of Risk-Based Pricing of Insurance

Calls for Insurance-Price Legislation Would Hurt Policyholders, Not Help

Illinois Lawmakers Reject Risk-Based Pricing Challenge

Calif. Risk/Regulatory Environment Highlights Role of Risk-Based PricingIllinois Bill Highlights Need for Education on Risk-Based Pricing of Insurance Coverage

Affordability, Auto Insurance, Homeowners Insurance, Insurance Industry, Regulation, Risk Management

New Triple-I Issue Brief Puts the Spotlight on Georgia’s Insurance Affordability Crisis

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Insurance affordability in Georgia is dwindling as claim frequency and insurer costs soar, according to the latest issue brief from Insurance Information Institute (Triple-I), Trends and Insights: Georgia Insurance Affordability.  

Given the state’s below-average income vs. above-average insurance expenditures, Georgia ranks 42nd on the list of affordable states for homeowners insurance and 47th (plummeting from the 2006 high of 27th) for personal auto affordability, according to reports by the Insurance Research Council. This brief provides an overview of how several factors, including skyrocketing costs from litigation, pose risks to coverage affordability, availability, and other potential economic outcomes for Georgia residents. Tort reform is discussed as a legislative solution to the challenge of legal system abuse – excessive policyholder or plaintiff attorney practices that increase costs and time to settle insurance claims. 

The Georgia insurance market grapples with multiple risk factors 

From 1980–2024, Georgia was impacted by 134 confirmed weather/climate disaster events in which losses exceeded $1 billion each. At least 38 of those events happened in the last five years, with 14 in 2023. Homeowners in Georgia’s most climate-risk-vulnerable counties, such as the coastal and most southern parts of the state, can face double-digit premium hikes or nonrenewals. Also, data indicates the rate of underinsured motorists in Georgia is twice as high as the national average, and the rate of uninsured motorists is 25 percent higher. Injury claim severity in the state is slightly higher than in the rest of the country.   

Data indicates that litigation costs have become a pervasive concern for risk management. 

Rising claim frequency and litigation costs put coverage affordability and availability at risk. For example, the IRC findings across personal auto lines show a dual trend in Georgia of increased claims and litigation. Property damage liability claims per 100 insured vehicles are 15 percent higher, and relative body injury claims frequency is 60 percent higher. According to IRC, the rate for private passenger litigation in Georgia is nearly three times that in the median state. 

The Georgia Office of Commissioner of Insurance and Safety Fire (“OCI”) reviewed all lines across personal and commercial auto, personal and commercial umbrella, and commercial general liability (homeowners liability was excluded). The five-year average count for liability claims increased 24.9 percent (2014 – 2018 at 583,756 vs. 2019-2023 at 729,191). A rising percentage of claims with payment are full-limit claims, and the OCI analysis indicates litigation is driving that increase. While costs rose for both litigated and non-litigated claims, the number of claims with legal involvement dominated paid indemnity for most lines of business, and litigated claims comprised a growing portion of the total paid indemnity. 

Attorneys appear to have revved up their mining for lawsuits in Georgia. Law firms spent $160 million on advertising in Georgia, according to preliminary data from the American Tort Reform Association (ATRA). Outdoor ads for lawsuits increased by 119 percent in GA during that time. It might not be a surprise then to see that the Georgia OCI report shows legal (attorney involved) claims dominated Personal Auto claims for Bodily Injury, comprising 62 percent of claims and 86 percent of total indemnity paid for closed claims in Accident Year 2023. A review of losses of $1 million or more by accident year that have closed during the 2014 to 2023 period shows that each accident year cohort surpasses the count from the previous accident years.   

Recently introduced state tort reform legislation may help to stabilize insurance costs. 

Analysts estimate that litigation costs Georgia residents $880 million annually, or an average of $1,415 per resident.  Sean Kevelighan, Triple-I CEO, says “understanding how these trends drive up costs and identifying policy levers for tort reform legislation can ultimately bring positive outcomes for Georgia’s economy and its consumers and business owners.” 

As part of our commitment to educating stakeholders, Triple-I has launched a multi-faceted campaign to raise awareness of the mounting costs of legal system abuse in Georgia and other states. We invite you to view the video statement by our CEO Sean Kevelighan, interviews capturing the opinions of consumers about legal system abuse, and read the full issue brief, Trends and Insights: Georgia Insurance Affordability. 

Affordability, Emerging Risks, Insurance Industry, Insurance News

Multi-Family Affordable Housing Market Challenged by Surges in Insurance Premiums

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urban apartment buildings

With ​​nearly half of all homes in the United States at risk of “severe or extreme” damage from events like flooding, high winds, and wildfire, the perfect storm of climate risk and legal system abuse creates obstacles for homeowners. It also threatens a more financially vulnerable segment of the housing market, as increased premiums and waning coverage for affordable housing providers can put millions of renters at risk of becoming rent-burdened (paying more than 30 percent of gross monthly income in gross monthly rent) or unhoused.

In June of this year, about two dozen real estate, housing, and nonprofit organizations — self-describing as a “broad coalition of housing providers and lenders” —  wrote a letter to Congress and the Biden administration urging them to address the issue of property insurance affordability. Although the coalition declared its intent to represent all stakeholders in the housing market, it called attention to special concerns of affordable housing providers and renters.

The letter referenced an October 2023 survey and report commissioned by the National Leased Housing Association (NLHA) and supported by other affordable housing organizations. The survey involved more than 400 housing providers that operate 2.7 million rental units — 1.7 million of which are federally subsidized. Findings mentioned in the letter and report about the affordable housing market include:

– Rate increases of 25 percent or more in the most recent renewal period for one in every three policies for affordable housing providers.

– Over 93 percent of housing providers said they plan to mitigate cost increases, with three most commonly cited tactics: increasing insurance deductibles (67 percent), decreasing operating expenses (64 percent), and increasing rent (58 percent).

– Respondents cited limited markets and capacity as the cause for most premium increases, followed by claims history/loss and renter population.

According to the U.S. Department of Housing and Urban Development (HUD) guidelines, affordable housing is generally defined as housing for which the occupant is paying no more than 30 percent of gross income for housing costs. These units are often regulated under various regional and nationwide programs, which typically offer some form of government subsidy to the property owners – usually either through tax credits, government-backed financing, or direct payments. Rising insurance premiums for affordable housing properties have come at a particularly challenging time for both renters and affordable housing property owners, a large share of which are non-profit organizations.

Census Data indicates that in total renters comprise around 36 percent, or about 44.2 million of the 122.8 million Census captured households. The number of rent-burdened households nationwide has hit an all-time high. The latest rental housing market figures, taken from a report issued by the Joint Center For Housing Studies Of Harvard University, counts 22.4 million rent burdened households in this category, amplifying the dire need for more affordable units. That report also reveals the proportion of “cost-burdened renters rose to 50 percent, up 3.2 percentage points from 2019.” 

Additionally, homelessness increased 12 percent in 2023. More than 650,000 people were unhoused at some point last year — the highest number recorded since data collection began in 2007. A Wall Street Journal analysis reveals the most recent counts for 2024 are already up 10 percent, putting the total number of unhoused persons on track to exceed last year’s amount.

Meanwhile, the affordable housing stock is aging and the cost of debt to acquire or build multifamily properties has risen, too. As interest rates have been high in recent years, developers must offer investors greater returns than treasury notes. The problem is complex, but the outcomes can be brutally straightforward.

Higher insurance premiums on rented properties increase costs, which, in turn, get passed on to renters. Market-rate landlords can usually raise rents to cover the increasing costs of capital and insurance premiums. However, affordable housing providers are locked into rents set by the government. These amounts are tied to regional incomes, which can be depressed by wage stagnation. Thus, renters who rely on affordable housing can experience the impact of rising premiums in the form of decreased services and lapsed maintenance (as housing providers dip into other parts of the operating budget to make up the shortfall) or a decrease in the number of units on the market as housing providers extract units or leave the market.

In July of this year, HUD convened a meeting with various stakeholders to discuss policies and opportunities to address this and related challenges while managing potential risks to the long-term viability of affordable housing. HUD has modified its insurance requirements for apartment buildings with government-backed mortgages, now allowing owners to set their deductible for wind and storm events as high as $475,000, up from $250,000. This tactic may reduce premiums but can also raise out-of-pocket costs after a storm or severe climate event. Another approach in progress is the revision of HUD’s methodology for calculating the Operating Cost Adjustment Factors (OCAF), parameters for annual percentile increases in rent, for eligible multifamily properties to better account for increasing insurance costs.

Triple-I is committed to advancing conversations with business leaders, government regulators, and other stakeholders to attack the risk crisis and chart a path forward. To join the discussion, register for JIF 2024. Follow our blog to learn more about trends in insurance affordability and availability across the property and casualty market.

Affordability, Homeowners Insurance, Insurers and the Economy

How affordable is homeowners insurance?

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The average homeowners insurance premium was $1,249 in 2018, up by 3.1 percent from the previous year, according to the latest data from the National Association of Insurance Commissioners (NAIC).  In 2017 the average premium was up 1.6 percent.

To put this in context, the consumer price index, a measure of the price of goods and services in the United States, rose by 1.9 percent in 2018 and by 2.1 percent in 2017.

The average renters insurance premium fell 0.6 percent in 2018, marking the fourth consecutive annual decline. 

It’s important to note that the average homeowners or renters premium is an imperfect measure of the relative “price” of insurance, according to the NAIC. That’s because the ultimate cost of your policy will depend on a wide variety of factors such as the differences in hazards, economic conditions, and real estate values from state to state.

Insurers determine homeowners insurance premiums based on the amount of coverage purchased (generally based on the value of the insured property), the type of property covered, the types of perils covered, and the specific limits and deductibles a policyholder chooses.

Click here for a state-by-state graphic of average homeowners insurance premiums.

The financial burden of homeownership insurance
Americans generally don’t view the cost of homeowners insurance as a financial burden. Triple-I’s 2017 Consumer Insurance Survey found that only 31 percent of Americans consider homeowners insurance to be a financial burden. This is the lowest level in more than a decade and represents a significant drop from the 49 percent of people in 2009 who said the cost of homeowners insurance was a financial burden.

One reason homeowners insurance has not been considered a financial burden is that Americans’ income growth has consistently outpaced home insurance costs; however this trend may be temporarily interrupted by the pandemic-related recession of 2020. According to an analysis by Risk Information‘s Property Insurance Report (PIR), the trend was already apparent in 2018.

The PIR report suggests that the trend toward more affordable insurance appears to have continued in 2019, but acknowledges that in 2022, when the NAIC releases average homeowners premiums for 2019, the HURT Index may fall lower than 1.4 percent for the first time since 2010.

Customer service

“Homeowners insurance customers are the single-most-valuable group of personal lines customers for P&C insurers,” said Robert M. Lajdziak, senior consultant of insurance intelligence at J.D. Power.

“They have a significantly higher bundling rate, 38 percent higher product penetration beyond home and auto, and their tenure is twice the length of a monoline auto customer. The potential ‘lifetime customer value’ of homeowners makes meeting their needs and motivations to renew a critical task for the industry.”

Large, established insurers and insurtech startups are expected to compete for customers’ premium dollars by delivering great service and converting renters insurance clients into homeowners insurance clients, according to J.D. Powers.

Millennial customers in particular are more likely to select their homeowners insurer based on good service experience and are much more likely than Boomers to use insurer-provided tools to inventory their possessions, thereby increasing the level of engagement with their insurer and creating additional opportunities to develop loyalty through good customer service.

Echoing J.D. Powers’ findings, a Deloitte survey found that respondents aged 18 to 34 with $50k to $100k+ annual income who have purchased a house in the past three years, referred to as the “gadget group,” are more likely to purchase a ‘connected and preventative’ home insurance service than any other type of policy.

Homeowners have also expressed a strong demand for parametric type home insurance products, according to Deloitte. This type of insurance pays claims of a pre-agreed amount automatically when an event falls within set parameters, such as a level of rainfall or speed of wind.