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Across the country, homeowners are facing a home insurance crisis. Not only are premiums on the rise, but the policies themselves are becoming harder—and in some places, nearly impossible—to find.
In states vulnerable to natural disasters like California, Florida, Texas, and Louisiana, major insurers are pulling out or refusing to renew policies, leaving millions of Americans scrambling for coverage as wildfire seasons grow longer and storms more destructive.
Now, in the wake of this year’s devastating wildfires in Los Angeles County, lawmakers are renewing their calls for a federal solution. U.S. Sen. Adam Schiff has reintroduced the INSURE Act, a proposal that would create a federal reinsurance program to help stabilize the home insurance market.
The goal: Make insurance both available and affordable in high-risk areas and stop the slow erosion of one of the core pillars of homeownership.
“Too many families and small businesses are struggling to keep up with the rising costs of insurance, and steep year-after-year price increases are simply unsustainable,” Schiff said in a statement. “Significant steps must be taken to address this crisis, and the INSURE Act is one of them.”
If passed, the INSURE Act could reshape how catastrophic risk is shared and whether homeowners in regions prone to disaster can continue to protect their home.
“All across America, in fire zones and flood plains and well beyond, the most valuable property a family may own is becoming uninsurable. This must be addressed with urgency,” Schiff’s statement continued.
What the INSURE Act proposes
The bill would establish a federal catastrophic reinsurance program within the U.S. Department of the Treasury. Participating insurance companies would gain access to this government-backed safety net, which is designed to absorb some of the financial risk they face from increasingly frequent and severe disasters like wildfires, floods, hurricanes, and earthquakes.
In return, insurers would be required to offer comprehensive coverage to homeowners.
The legislation would also cap insurer liability during major disaster events as further incentive for insurers. The exact cap amount would be determined by the Treasury secretary and an expert committee.
Supporters argue this would create more pricing predictability and help insurers stay in the market, even after devastating events, which in turn could reduce premiums for policyholders while keeping insurance options available in high-risk regions.
Why it’s needed
The home insurance crisis is no longer a future threat—it’s a present-day emergency. Today, nearly 1 in 7 homes are without home insurance, because the owners find it too expensive or can’t find a policy.
The gap between risk and coverage was thrown into stark relief earlier this year when wildfires tore through Los Angeles County. In the aftermath of the Eaton and Palisades fires, an estimated 75% of affected homeowners were underinsured, with some facing six- or seven-figure shortfalls in rebuilding costs.
And it’s not just California. Just this month, State Farm announced a near 30% increase in premiums for homeowners in Illinois after at least two years of paying out more in claims than bringing in from premiums.
But the consequences reach far beyond monthly premiums. Without adequate insurance, homeowners can’t rebuild after a disaster, buyers can’t close on new home purchases, and sellers may see home values plummet. In some cases, mortgage lenders may even refuse financing if coverage isn’t available.
“Thousands of Angelenos lost everything in the recent L.A. fires because their homes weren’t insured—not because they didn’t try, but because it wasn’t available. That is unacceptable,” Rep. Sydney Kamlager-Dove said via statement.
The political landscape
Schiff introduced the INSURE Act in the House during a previous session of Congress. Now, as a member of the Senate, he’s reintroducing the bill with renewed urgency.
Democrats are framing the legislation as a necessary homeowner protection measure, not just a climate policy. Their message: This is about keeping Americans housed and insured in an increasingly hostile market.
“As natural disasters become more frequent and severe, families should not be punished with skyrocketing insurance costs or losing their coverage altogether,” said Rep. Salud Carbajal, who is co-sponsoring the House version of the bill.
While the INSURE Act is being championed by coastal lawmakers, the crisis it aims to address is spreading. Inland states are increasingly experiencing severe weather events that disrupt insurance markets, opening the door for potential bipartisan interest. Colorado introduced a similar reinsurance plan in its statehouse this year.
As affordability deteriorates and coverage gaps widen, pressure is mounting on lawmakers nationwide to act.
Potential impact on buyers, sellers, and homeowners
If passed, the INSURE Act could change the landscape for millions of homeowners—especially in high-risk regions where the cost or availability of coverage has made buying, selling, or staying in a home increasingly difficult.
For homebuyers, the bill could be the critical difference between securing the policy needed to close on a mortgage and not. For sellers, that could translate to fewer deals collapsing at the last minute due to a buyer’s inability to secure coverage.
But current homeowners have the most to gain in the form of rate relief. By capping insurer liability and spreading disaster risk across a broader national pool, the bill aims to reduce the extreme year-over-year premium hikes now becoming the norm.
“The last thing families should have to worry about when fleeing disaster is their insurance,” said Kamlager-Dove. “With the climate crisis increasingly causing catastrophes—especially here in California—I am proud to introduce the INSURE Act, which would ensure that all Americans can access extensive, affordable home insurance.”
What critics are saying
While the bill has the backing of consumer advocacy organizations United Policyholders and Consumer Watchdog, the Reinsurance Association of America—essentially the insurer of insurance companies—has come out against the INSURE ACT.
“A federal (re)insurance program is not needed; it does not address the root causes of insurance premium increases in certain parts of the country and would only increase risk and resulting premiums by encouraging development in high-risk areas,” RAA President Lee Covington told Insurance Business Magazine.
The RAA’s main concern is that reinsurance would create a false sense of security, leading people to settle down and even rebuild in the very places that are most at risk of disaster. This could perpetuate a cycle of catastrophic loss, followed by insurer payouts and corresponding rate hikes.
The American Property Casualty Insurance Association also spoke out against previous versions of the bill with similar concerns.
“We appreciate the interest of Rep. Schiff in addressing the insurance availability and affordability challenges in many areas of the country,” Nat Wienecke, APCIA’s senior vice president of federal government relations, told Insurance Business Magazine in early 2024.
“However, the combination of climate change, accumulation of homes in hazard-prone regions, significant increases in labor and materials costs due to inflation, legal system abuse, and outdated regulatory systems cannot be overcome by a broad federal program,” she continued.
Still, supporters argue the status quo is no longer working. As climate disasters increase in frequency and severity, even homeowners in inland states are beginning to feel the ripple effects of a shrinking, stressed insurance market. The question now is not whether the system should be reformed, but how urgently that reform needs to happen.