As many as 40% of American homeowners claim that they are prepared for extreme weather changes that continue to impact the United States at increasingly rapid rates. However, a substantial third of the group admit to not having taken any preparedness measures at all, despite the fact that the U.S. saw 27 different billion-dollar weather events in 2024. These storms left damage totaling over $182 billion (NOAA, 2024).
It is unlikely that this lack of preparedness is due to apathy alone. The increasing stress on American household budgets is competing head-to-head with a rising level of weather risk that some would prefer to ignore. The result is a shrinking number of American homes with adequate storm insurance protection.
Additional pressure to keep some cash on hand to cover surprise home repairs also appears to accelerate the trend of unpreparedness.
Extreme weather is intensifying, and so is the cost
Extreme weather gets more intense, and more expensive to American homeowners, with every year that passes.
As shown by 2024 NOAA data, the upwards trend of billion-dollar disasters per year has continued to rise between 2019 and 2024, with the average total seasonal recovery costs doubling over the long-term average of the years 1980-2024. When you include the addition of rising materials and labor costs for rebuilds (up ~45%, via the U.S. Treasury data), and compare these costs to the rise of risk pricing, the pressure on budgets across the country becomes easier to understand.
Higher costs imposed on both insurers and policyholders appear to be driving a trend that neither side sees as ideal–fewer fully insured homes facing a rising need for the exact insurance that is often being overlooked or under-utilized.
Too many American homes are underinsured, or uninsured completely
Data from both government and industry sources suggests that the percentage of underinsured American homes may be as high as 67% (Senate Budget Committee data), with the average insurance gap per home sitting at $139,000–significantly more than most homeowners would have access to for emergency purposes if their home was to be destroyed by severe weather.
There is a more serious gap at play, though. LendingTree data from March, 2026 indicates that as many as 12.2 million U.S. homes, approximately 1 in 7, lack any home insurance coverage.
The homeowners in these groups put themselves in a dangerous position, especially those living in storm-prone states. This lapse of protection deserves attention. Remaining uneducated on the details of home insurance and its benefits (and limitations) is a mistake that often proves painful to homeowners who may have rushed through a home purchase or foregone some of the recommended inspection or insurance steps that should follow such a transaction.
The danger to the American homeowner as a population is there: in the lack of specialized knowledge and experience in purchasing home insurance. An increasing percentage of the homeowner public simply lacks awareness of the protection they could easily partake of.
How can taking the time to educate yourself on home insurance affect your satisfaction with a home purchase?
American coverage is slipping due to rising premiums and lower availability
What are the factors driving this wave of underinsurance? For the most part, increasing insurance premium costs–up 24% in the last three years, and cumulatively up nearly 47% since 2020–are the main impediments for homeowner coverage.
The rate of non-renewals forced by insurance agencies is also increasing, adding an additional obstacle for homeowners seeking adequate coverage for their homes and families.
The alignment of higher prices with added difficulty in actually being approved to purchase or renew a policy means that greater numbers of homes are going underinsured or uninsured every day.
Some of these industry shifts are region-specific. State Farm announced in 2024 its decision to refuse renewals or new home policies to 72,000 customers in California.
Allstate also ordered a retreat from California and Florida in 2022, predating the State Farm pull-out by more than a year.
How are Americans taking these changes to the market? A recent survey from Insurify reveals some of the thoughts behind decreasing numbers of insured households. Seeing 28% of respondents say that they would drop their home insurance coverage altogether if possible gives some insight into the growing reluctance to spend hard-earned cash on a product whose returns will be unknown or non-existent for many customers.
Others feel that the added protection is worth some sacrifice. Over 57% of respondents admitted that they had made notable sacrifices to maintain their home insurance coverage each year. Corners that were cut ranged from delaying planned home improvements, to cutting back on niceties like dining out, to actually putting off other bills in favor of keeping their insurance coverage current.
The 22% of homeowners who responded that they had made sacrifices in the form of delayed home repairs or improvements is an important group to note.
The hidden costs of surprise repairs are a real hardship for many households
Thinking back to that last group–the homeowners who had delayed planned improvements to their homes in order to make sure they had the cash for ongoing home insurance coverage–what if the option to delay improvements (or repairs) wasn’t optional?
That was the case with a full 83% of the homeowner population represented in the 2024 Hippo Housepower Report. These homeowners reported that unexpected maintenance issues affected them adversely last year. Roof damage, water intrusion and damage, and issues with doors and windows were the most common reasons for these surprise expenses.
This kind of hidden or surprise expense is an unfortunate shock for many homeowners, especially less experienced first-time homebuyers. They can often find themselves feeling lost in a maze of financing requirements, expenses, and other obstacles that may appear to be impossible to plan for.
Nearly half of the reported homeowners spent over $5,000 on surprise home repairs in 2024. This was money out of their own pockets, meaning savings were drained, luxuries were likely done without, and monthly household budgets were thrown into chaos.
When expenses of this size are dropped on a household, the home insurance premium may already be budgeted for and covered. But the idea of filing a claim and paying the deductible may look like an impossibility for too many homeowners today.
Consider the limitations revealed by a recent Bankrate study. A majority of American homeowners (59%, 2025) reported that they would be unable to handle a $1,000 emergency expense from savings alone. Additional debt, such as a credit card payment, would be needed to cover the cost and still pay other expenses.
With this level of uncertainty present in so many households, it’s more clear why insured rates are dropping, and why homeowners’ habits are trending towards caution, hesitation, or outright stubbornness in some cases.
Who is most at risk from a lack of coverage for extreme weather?
The way these weather patterns are likely to impact American homes lines up, as often is the case, along the lines of income disparity. The same Bankrate data notes that fewer than half (48%) of the surveyed U.S. homeowners who earned under $50K/year felt prepared to maintain insurance coverage against extreme weather perils for their homes. Compare that to the 71% of homeowners earning $100,000/year or more who did feel prepared to get an idea how a higher level of take-home pay can ease the decisions required of a head of household to keep their home and family safe.
Geographical features also come into play, with the densest pockets of uninsured homes being found in Louisiana, New Mexico, and West Virginia. It’s also valuable to note that Southern states, both coastal and interior, are most likely to be burdened with a percentage-based deductible that further elevates the threat of ‘surprise costs’.
What can you do to empower your household?
Add a few regular steps to your home financial planning practice and you can make life easier for yourself in the case of extreme weather damage in your future.
Your first step to solving the problem
If you’re uncertain about your level of coverage for wind and hail storm damage, contact your local insurance agent to understand your current policy and any additions that could be helpful to your home’s protection profile.
You can get a free quote for a wind and hail policy today from our Get a Quote page, your phone, or through the chat box on any page of our site.
Sources:
“Billion-Dollar Weather and Climate Disasters” National Centers for Environmental Information, https://www.ncei.noaa.gov/access/billions/
Iacurci, Greg. “Homeowners are paying much more for insurance — and keeping coverage is getting harder” CNBC, Aug. 06, 2026, https://www.cnbc.com/2026/08/06/homeowners-insurance-costs-soar-naic-report.html
Gunara, Maggie. “Nearly 1 in 7 Homes Across US Are Uninsured” Lendingtree, Mar. 02, 2026, https://www.lendingtree.com/insurance/homes-uninsured-study/
Vives, Ruben. “State Farm won’t renew 72,000 insurance policies in California” Los Angeles Times, Mar. 23, 2024, https://www.latimes.com/california/story/2024-03-23/state-farm-wont-renew-72-000-insurance-policies-in-california-worsening-the-states-insurance-crisis
Jacobson, Lindsey. “Insurers such as State Farm and Allstate are leaving fire- and flood-prone areas” CNBC, Feb. 04, 2024, https://www.cnbc.com/2024/02/05/what-homeowners-need-to-know-as-insurers-leave-high-risk-climate-areas.html
Brannon, Matt. “Insurance Premium Pressure: 57% Have Made Financial Sacrifices to Afford Home Insurance” Insurify, Feb. 19, 2026, https://insurify.com/homeowners-insurance/insights/sacrifices-survey/
“Hippo Housepower Report: Home Protection Priorities in 2025” Hippo Blog, Jan. 07, 2025, https://www.hippo.com/blog/housepower-report-2024
Gray is the Senior Content Specialist at Sola Insurance, working with the Sales and Marketing teams to provide helpful, valuable content for homeowners and agents. Gray has worked previously in finance, logistics, and advertising.
