A new study from the Senate Budget Committee shows that the insurance problem caused by climate change is hurting Washington, D.C., Virginia, and Maryland more and more. Homeowners in these areas are facing rising bills and a rise in non-renewal rates, which is putting property values and the economy at risk.
The data shows that Virginia counties experienced some of the steepest increases in non-renewal rates nationwide, signaling that the crisis is spreading far beyond the traditional high-risk zones of Florida, California, and Louisiana.
Virginia: A Canary in the Coal Mine
In 2023, Virginia ranked among the top states grappling with spiking non-renewal rates. Coastal places like Norfolk, Newport News, and the Tidewater region saw rates of non-renewal rise by more than 30% since 2018.
Rising sea levels, storms, and floods can happen in these areas, which makes it harder and harder for insurers to justify covering them. The Senate report warns that rising premiums and insurer withdrawals in these areas are early indicators of a broader economic destabilization.
Even inland counties in Virginia are not immune. Regions with increasing wildfire risks, such as parts of the Shenandoah Valley, are experiencing non-renewal rates that mirror those of coastal areas. In addition to possibly shutting out homeowners who depend on insurance to get mortgages, the trend poses a danger to the viability of the state’s housing market.
The report notes, “Virginia’s non-renewal rates surged by 67% between 2018 and 2023, placing it among the top states facing an insurance availability crisis”.
Maryland: Rising Costs and Growing Risks
While still in the top tier of states facing an insurance crisis, Maryland is showing clear signs of trouble. Counties like Anne Arundel, Baltimore, and Prince George’s have reported steady increases in non-renewal rates due to flooding risks and severe storms. Premiums in these counties have risen by up to 20% since 2018.
The Senate report indicates that Maryland counts among the nearly 67% of homes in the United States that are now underinsured. The report noted that the gap in coverage leaves homeowners vulnerable to financial ruin if disaster strikes. The authors said as climate risks rise, more insurance companies might abandon Maryland which would likely lead to more hikes in the cost of premiums and hurting coverage availability.
Washington, D.C.: A Growing Threat
Homeowners in the nation’s capital are also feeling the effects of the climate-driven insurance crisis.
Since 2018, insurance premiums in Washington, D.C., have risen by over 20%. The findings include the danger extreme weather poses to the District’s infrastructure, particularly the Potomac River basin. If that continues, officials fear that insurers will exit D.C. entirely.
“An insurance availability crisis that spreads inland will necessarily affect more people than one that remains confined to the immediate coast,” the report stated.
A Nationwide Crisis with Local Impacts
In 2023, 82 of the top 100 counties with the highest non-renewal rates were coastal, low-lying delta, or wildfire-prone regions. Virginia’s experience is part of a broader national trend where insurers flee certain markets due to escalating climate risks.
Between 2018 and 2023, Florida and Louisiana experienced non-renewal rate increases of 280% and 267%, respectively. However, the crisis is spreading to less traditionally vulnerable states. Oklahoma, for example, ranked seventh in 2023 for non-renewal rates due to severe convective storms and wildfire risks.
Economic Consequences of Inaction
The Senate report also serves as a reminder that most mortgages cannot be secured without homeowners’ insurance. The authors likened the current situation to the 2008 financial crisis and cautioned that a collapse in property values could lead to an economic catastrophe.
“If those homes become uninsurable and unmarketable, the values of the homes will plummet,” the report authors wrote. “Unlike the experience of 2007-2008, these homeowners will have no expectation that the values of their homes will ever recover. Climate change is no longer just an environmental problem. It is a looming economic threat.”
