Insurance Withdrawal and Financing Gaps in U.S. Climate Risk Zones (2025)

Private Insurer Withdrawal by State (2023-2025)

Major carriers (State Farm, Allstate, AIG, Travelers) have exited or curtailed coverage in California, Florida, Louisiana, and the Gulf/Atlantic coasts. Over 15 insurers reduced or suspended new homeowner policies in high-risk states.
Sources: NAIC, CA DOI, FL OIR, FEMA 2025

Reinsurance Market Contraction

Global reinsurers (Swiss Re, Munich Re, Lloyd’s) raised U.S. catastrophe reinsurance prices by 35–60% since 2023. Layered reinsurance structures are shrinking, with deductibles now exceeding $500M for state pools.
Source: AM Best, Guy Carpenter, NAIC 2025

State-Backed Insurer Growth and Exposure

California’s FAIR Plan and Florida’s Citizens have become the largest home insurers in their states, now covering 1.7M and 1.4M homes, respectively. Both operate at a deficit and are exposed to catastrophic loss.
Sources: CA FAIR Plan, FL Citizens, NAIC 2025

NFIP Structural Insolvency and Coverage Gaps

The National Flood Insurance Program (NFIP) holds >$20B in Treasury debt, with annual premium revenue billions below projected losses. Renters, undocumented residents, and informal housing remain systematically excluded.
Sources: FEMA, CBO, GAO 2025

Social and Market Impacts

Uninsurability drives mortgage denials, foreclosure risk, and displacement. FHA/VA loan approvals are delayed in red-zoned areas. State pools now levy surcharges on all policyholders after major events.
Sources: FHA, VA, NAIC, CA DOI 2025

Synthesis and Policy Risks

  • Insurance withdrawal is a systemic, not cyclical, contraction—reshaping the geography of U.S. housing and finance.
  • State-backed pools are absorbing unmanageable risk, exposing taxpayers to catastrophic losses.
  • NFIP insolvency and reinsurance retreat threaten the viability of public safety nets and the stability of housing markets.
Research Priorities:
Dynamic risk pricing
Public reinsurance models
Mortgage-insurance coupling
Social protection for the uninsured
Policy Risks:
State fiscal crisis
Housing market contraction
Mass displacement
Erosion of public trust
Data: NAIC, FEMA, CA DOI, FL OIR, AM Best, CBO, GAO, FHA, VA, CA FAIR Plan, FL Citizens (2023–2025).

Insurance Withdrawal and Financing Gaps