New Reporting: The Property Insurance Crisis is Creating a “Financial Time Bomb”
FOR IMMEDIATE RELEASE
May 8, 2025
Contact: contact@insurancefairnessproject.com
New Reporting: The Property Insurance Crisis is Creating a “Financial Time Bomb”
Several pieces of recent journalism underscore the systemic economic risk posed by the ongoing national home insurance crisis, which could be hurtling the country toward another 2008-level financial crisis (or worse):
Fast Company: Could climate change trigger the next subprime mortgage crisis?
Inside Climate News: An Insurance Crisis Compounded by Climate Change Threatens the Broader U.S. Economy
Pro Publica/ NY Times: How Climate Change Could Upend the American Dream
Fast Company reported yesterday on the “financial time bomb” that “will be triggered by home insurance”:
Current homeowners and retirees are sitting ducks [...] Imagine a retiree watching their insurance premium spike from $7,500 to $17,000 overnight. [...]
Their options are grim: Drain savings, sell, default, or, for those who own their homes outright, “go bare,” skipping insurance entirely—a risky bet that leaves them one disaster from devastation.
Multiply that by millions of people, and you get a fire sale of homes, crashing property values, and ghost towns of stranded assets.
Last week, Inside Climate News explained the potential “death spiral” further:
Current homeowners are more likely to become delinquent on their mortgages after an insurance premium increase. Prospective buyers can’t find or afford homes. Developers can’t bring new units to market. And operating costs for landlords can reach an unsustainable level, Edelman said, with effects trickling down to real estate agents, the lenders, mortgage services—the entire housing ecosystem. [...]
Earlier this year, ProPublica (co-published with the New York Times) presented a startling argument that the climate-fueled insurance crisis is “upending the American dream”:
The implications are staggering: Many Americans could face a paradigm shift in the way they save and how they define their economic security. Climate change is upending the basic assumption that Americans can continue to build wealth and financial security by owning their own home.
“Rising insurance premiums are just the start of a much larger economic crisis being fueled by extreme weather disasters and climate change,” said TJ Helmstetter, spokesperson for the Insurance Fairness Project. “Insurers keep demanding more rate hikes, the cost of housing keeps rising, more disasters occur, and the cycle continues. Hardworking families have paid enough and shouldn’t be expected to bear the full cost of climate change on their shoulders. It’s time for government leaders to do something about it.”
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The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
