Letter to Senate Committee on Banking, Housing, and Urban Affairs Hearing on Insurance and Disasters

May 1, 2025

The Honorable Tim Scott
Chairman
Committee on Banking, Housing, and Urban Affairs
United States Senate
Washington, DC 20510

The Honorable Elizabeth Warren
Ranking Member
Committee on Banking, Housing, and Urban Affairs
United States Senate
Washington, DC 20510

RE: Senate Committee on Banking, Housing, and Urban Affairs Hearing, “Examining Insurance Markets and the Role of Mitigation Policies” (May 1, 2025)

Dear Chairman Scott and Ranking Member Warren,

The United States faces a housing affordability crisis, driven largely by a mismatch between strong demand for housing and limited supply. Rising property insurance costs have significantly worsened the problem.

Property insurance costs have increased across the country. Recent research shows that homeowners’ premium payments rose an average of 33% nationwide between 2020 and 2023—with some states seeing average premiums jump by as much as 50%. The multifamily housing market shows a similar trend, with the average annual cost of insurance increasing 129% nationally to $636 per unit of market-rate rental housing from 2018 to 2023. Despite higher premiums, homeowners and rental housing providers often receive less coverage. Private insurers have also started exiting some regional markets due to uncertain risk levels and restrictions that prevent them from charging adequate premiums that reflect those risks.

The J. Ronald Terwilliger Center for Housing Policy recently released a white paper examining the main drivers of rising property insurance costs and their impact on homeowners and multifamily property owners. The paper outlines policy options that could help address rising property insurance costs in both the short and long term. All the options have some measure of bipartisan support and aim to advance three key priorities in addressing rising property insurance costs: mitigating disaster-related risks; improving market data collection, transparency, and stability; and supporting affordable housing. While not exhaustive, these options can serve as a starting point as you weigh how the federal government can play a meaningful role in addressing rising property insurance costs.

We thank the committee for convening this hearing and stand ready to assist as you consider bipartisan policies to help address rising property insurance costs, reduce disaster-related risks to our nation’s housing stock, and promote housing affordability.

Sincerely,

Andy Winkler
Director, Housing and Infrastructure Project
Bipartisan Policy Center