Senate hearing: witnesses say U.S. homeowners insurance market is under strain as premiums rise and carriers pull back

At a Senate Banking, Housing and Urban Affairs Committee hearing, witnesses and local officials said the U.S. homeowners insurance market is under sustained stress that is reducing availability of coverage and raising premiums for many families.

The warning came from industry and policy witnesses who cited a mix of factors driving higher costs: record inflation and sharply higher building-material prices, a decade of rising catastrophe losses, litigation and fraud costs, constrained insurer capital, state regulatory limits on pricing and uncertainty from federal trade and program decisions.

Why it matters: Committee members and witnesses said higher premiums and nonrenewals threaten access to mortgages and long-term housing affordability in some regions, and can create localized financial instability for homeowners and local governments.

Industry trade group representative Robert Gordon, senior vice president at the American Property Casualty Insurance Association, said insurers are still trying to recover capital lost in recent years. "Homeowners insurers in 2023 ... paid out a dollar and 11¢ in claims and expenses for every dollar collected," Gordon said, explaining that underwriting has been unprofitable overall and that insurers have…