In Houston, Senator Whitehouse Warns of Nationwide Economic Risks from Extreme Weather-Driven Insurance Crisis

Houston is on the front lines of a nationwide insurance affordability and availability crisis that threatens to devastate property markets and crash the entire U.S. economy

Houston, T.X.—Today, Senator Sheldon Whitehouse (D-R.I.), Ranking Member of the Senate Environment and Public Works Committee (EPW), joined local community leaders in Houston to discuss how more frequent extreme weather is increasing out-of-pocket insurance costs for Texas families and making it harder to obtain coverage. 

In Texas, rising sea levels, worsening hurricanes, more extreme precipitation events, hotter temperatures, and more frequent wildfires are making it harder for residents to afford and obtain homeowners’ insurance.  Houston is on the front lines.  The Houston Chronicle recently reported that home insurance costs in the southeastern Houston metropolitan area are some of the highest in the nation. 

“It’s important to me to be in Houston because the homeowners’ insurance problem and the cascade of economic consequences that follow from it are going to hit all coastal states, like my state of Rhode Island.  Rhode Island is well behind Florida, which is first and worst, and Houston, which is not far behind Florida, but it’s coming for all coastal states,” said Ranking Member Whitehouse.  “I’m trying to go to places that are really in the thick of the home insurance meltdown so that we can build coalitions and solve the problem.   And now, with wildfires, it’s coming for the western states, too.  At the end of the day, you can move the deck chairs around on the insurance Titanic, but it doesn’t make the outcome any better unless you solve the underlying climate danger and weather risk problem.”

According to new polling, a staggering 92 percent of Texas homeowners are worried about the cost of their homeowners’ insurance—making it an even bigger concern than grocery prices (57 percent), electricity and heating costs (46 percent), mortgage payments (41 percent), or even gas prices (25 percent).  Nine in ten Texans also want their elected officials to do more to help reduce the rising cost of home insurance premiums.

Nationwide, a dual crisis in insurance affordability and availability threatens to destabilize the entire U.S. economy.  Without access to insurance, more Americans will be unable to secure a 30-year mortgage for a home.  This risks undermining property values and cascading into an economy-wide shock akin to the 2008 financial crisis.  Last Congress, the Senate Budget Committee under then-Chairman Whitehouse obtained national county-level non-renewal data from companies that accounted for about 65 percent of the national homeowners’ insurance market and published a first-of-its-kind public dataset and accompanying staff report exposing instability in insurance markets across the country.  

Federal Reserve Chairman Jerome Powell recently testified to the U.S. Senate Committee on Banking, Housing, and Urban Affairs that in 10-15 years, it will be impossible to obtain insurance or a mortgage in certain coastal and fire-prone regions of the country.  Research has estimated that extreme weather could erase $1.4 trillion in real estate value by 2055 due to insurance pressures and shifting consumer demand from the highest-risk places.