On Real Estate & More – June 2025

EVEN BEFORE THE CALIFORNIA WILDFIRES last January, more homeowners were having difficulty finding insurance or facing extremely high costs. Homeowners across the country have been receiving non-renewal notices from their insurers, sending them scrambling to find new policies, usually at a much higher premium.

In Oregon, premiums are up an average of almost 30% since 2020, according to the state’s Department of Consumer and Business Services, which reflects nationwide increases. But in Jackson County, premiums for many people have at least doubled due to wildfire risk.

Insurers across the U.S. are canceling policies more aggressively or raising rates whether consumers live in high climate risk areas or not. When this happens, homeowners are forced to make trade-offs, such as buying substantially reduced coverage, making pricey upgrades or repairs, or going without coverage at all.

Several items have contributed to rising insurance costs.

Inflation, which has sharply driven up building costs, is a major factor. According to the Bureau of Labor Statistics, between June 2019 and June 2024, labor for construction trade services rose 40 percent, and the cost of construction materials increased by about the same amount. So even if you’re not in a disaster-prone region, there are still significantly higher costs to repair and replace property and those higher costs are reflected in policy prices.

At the same time, more events are causing property damage that is expensive to repair. Climate change: warming oceans, longer droughts, higher inland temperatures, and extreme precipitation (rain, hail, and snow)—is causing natural disasters including wildfires, hurricanes, and floods to become more severe and frequent.

The combination of high risks and high costs has prompted some insurers to stop writing new policies in states like California and Florida. Having fewer insurers means some markets have less competition and higher premiums. Adding to the problem is the fact that some insurance companies are finding themselves on unstable financial footing.

When disaster strikes a home, the money an insurance company uses to pay for a claim comes from three main sources: premiums it has collected, returns from investments like stocks and bonds, and reinsurance, a type of insurance for insurers that helps cover them when other funds fall short. But reinsurance, which provides insurance coverage for companies worldwide, has become significantly more expensive for insurers to purchase.

If you have a loan, your lender requires you to carry homeowners’ insurance. If you don’t have a loan and live in an area where your options are limited and expensive for coverage, you might be tempted to go without insurance. If you are facing nonrenewal or increased premiums, consider taking the following steps:

  • Confirm when the current policy expires and ask for an extension. Having more time will help you work through options with your current insurer or shop around for new coverage without a pressing deadline.
  • Gather information. Ask for a written explanation.
  • File an appeal. But don’t wait for your appeal to be determined before you find another policy.
  • Make repairs. When requested, make repairs without delay to retain coverage.
  • Find a local, independent insurance agent. This can be more efficient than looking yourself, and they will be able to include smaller insurers that may operate only in your area or state. If you are not sure if an agent is independent, you can ask whether they work with multiple insurers or with just one or two companies.

Can’t find a private plan? Look for a state-sponsored one. Oregon, as well as many other states, offers a state-mandated plan for high-risk homeowners that is called “Fair Access to Insurance” (FAIR) plan. This plan has limited coverage and is really intended to provide catastrophic coverage. You may want to consider a second, more comprehensive policy to cover everything else. These add-on policies are known as “wraparound” coverage and can be purchased on the private market.

Rising insurance rates and more cancellations will continue to be an issue in the years to come for homeowners, so it is best to be informed about your options.