The Insurance Boycott: Why Homeowners Are Risking It All and Dropping Extreme Climate Insurance Policies

A manila folder is kept on the kitchen counter of a retired teacher named Marlene in Cape Coral, Florida. It contains the cancellation letter she wrote to the insurance company that had covered her bungalow for nineteen years, three months ago. The annual premium had increased to slightly more than $11,000. She had paid off her mortgage. After doing the math one evening and taking in the swaying palm trees outside her window, she concluded that she would prefer to take a chance on the next hurricane rather than continue to give up a third of her pension. The thing that should stop everyone is that she is not alone.

A subdued form of rebellion is emerging across the nation. Homeowners are purposefully canceling their policies, particularly those without mortgages. It’s not precisely a boycott in the sense of picket signs. There isn’t any momentum or movement behind it. However, there are enough instances of this behavior, as well as enough conversations in HOA meetings and on porch steps, that it is beginning to resemble one. Self-insurance is a courteous way for people to express their hope that nothing floods or burns.

This is unsettling based on the numbers. Over 1.9 million homeowners were dropped between 2018 and 2023, according to a 2024 Senate Budget Committee report that examined 249 million policies. With nonrenewal rates three times higher than the national average, Florida is in the lead. However, the narrative isn’t limited to the obvious. Oklahoma experienced a dramatic increase. South Carolina counties also did. Insurance companies are retreating even in areas of the Midwest where hail damage quietly accounts for 50 to 80 percent of claims. Perhaps we’ve been thinking too narrowly about climate risk, focusing only on hurricanes and wildfires while the costs creep in through unseen side doors.

Anyone working in the field will tell you that the math is just broken. The cost of rebuilding a home has surpassed nearly everything else in the economy, reinsurance costs have skyrocketed, and payouts have increased from $30.8 billion in 2013 to almost $80 billion ten years later. As insurers, they followed the instructions provided by their models. They reduced coverage, increased premiums, and abandoned entire zip codes. Some just became insolvent, especially in Louisiana. The problem is that equilibrium is not achieved when a market acts rationally and consumers are unable to keep up. People are quietly choosing not to participate.

Some of these homeowners believe they are being punished twice: once by a warming climate that they did not cause, and again by a financial system that is passing the blame. The New York Times was informed by Carolyn Kousky, an economist at the Environmental Defense Fund, that many Americans are first experiencing the effects of climate change in the insurance industry. That sounds about correct. As Senator Sheldon Whitehouse stated last year, it’s not the polar bears. The envelope in the mailbox is what it is.

The boycott subverts the reasoning behind insurance, which is why it is so subtly radical. The entire industry is predicated on the idea that consumers will make a payment now in order to prevent disaster later. However, the calculus changes when “now” becomes disastrous in and of itself. There could be a wildfire. There could be a hurricane. In contrast, the premium is paid on a monthly basis, just like rent. In particular, homeowners with fixed incomes are unable to survive without that certainty.

It’s difficult to ignore the fact that those who can least afford the consequences in the event of a disaster are frequently the ones most likely to discontinue coverage. Insurance results in quicker, more thorough, and more equitable recoveries, according to research. Without it, a generation’s worth of savings could be destroyed by a single storm. The cruel aspect of this entire arrangement is that. The boycott makes sense. It’s risky as well. Furthermore, nobody in Sacramento, Tallahassee, or Washington appears to have a solid idea of what will happen next. Marlene claims that she has a good night’s sleep. At least most nights.