Take a road trip through the U.S. private insurance landscape

It’s time to hit the open road of insurance realities across the United States! Just like a family road trip, where you might encounter unexpected detours and scenic overlooks, the journey of securing your insurance coverage has some twists and turns.

As you cruise through the varied landscapes of our nation, you’ll witness the growing number of natural disasters that are popping up like roadside attractions. From wildfires blazing through the West to tornadoes spinning across the heartland, to hurricanes flooding the South, to blizzards freezing out the North, these events are not just bumps in the road; they’re major hazards that can lead to steep insurance rate increases. Just as you wouldn’t ignore a warning sign on the highway, it’s crucial to recognize the impact of the frequency and severity of these disasters, how they are reshaping the insurance landscape, and ways to mitigate your risks.
 

In 2024, insurance companies maintained their focus on rebalancing portfolios, with a strong emphasis on achieving sustainable profitability. As a result, policyholders experienced rate increases and stricter coverage terms as they took on more risk while focusing on strengthening their assets against potential losses. These are trends we expect to continue into 2025.

The state with the biggest effective homeowner’s insurance rate increase in 2024 was Nebraska (22.7%), but 32 other states also saw rates rise last year. Among those were California and New York, which both experienced significant rate increases for high-net-worth individuals in excess of 20% since 2023, according to Guy Carpenter.

In 2024, many Florida homeowners received non-renewal notices, and others faced unprecedented rate increases. Insurance companies are looking to reduce their exposure to losses in the state and are passing their increased costs on to consumers. As a result, a significant amount of excess and surplus (E&S) business is being written in Florida. The emergence of E&S business is also occurring in many other states, including California, Texas, and Colorado, to name a few.

Higher rates and, in some cases, an inability to find coverage, have put millions of American homeowners in the position of taking on more risk. Recent analysis from the First Street Foundation, a nonprofit that studies climate risks, highlights how some parts of the country are essentially uninsurable due to risks like wildfires, and it’s not just California that is impacted.

To compensate for rising rates or an inability to find insurance, U.S. homeowners are taking on more risk. A recent study found that 25% had moved to a policy with more limited coverage, and 20% had decided to forgo certain insurance coverages entirely due to these unfavorable market factors. Making matters worse, just 15% of high-net-worth individuals had flood insurance policies, despite the fact that, in many cases, it is relatively affordable.

Personal auto insurance

Auto rates are also impacted by the availability of insurance but not as much as homeowners' coverage. From 2023 to 2024, the biggest influence on rates was the increased material and labor costs for claims due to inflation. Still, car insurance prices are expected to increase by an average of 7.5% in 2025, a marked slowdown from 2024, when rates rose an average of 16.5%. For high-net-worth individuals, personal auto rates increased by 7.4% each year from 2019 to 2024, with larger increases around 13.5% in 2023 and 2024.

Personal liability insurance

Personal liability insurance rates have also been on the rise. Average premium hikes in personal liability insurance have averaged double-digit increases each of the past three years, driven by larger liability claim settlements due to higher medical costs and increased jury verdicts.

Personal cyber insurance

Meanwhile, the cyber market is expected to maintain stable conditions in 2025 and offer buyers choice, higher limits, and flexible underwriting. Threats like persistent ransomware, social engineering attacks, wrongful data collection claims, and the potential risks posed by generative artificial intelligence are top of mind for underwriters this year. Unfortunately, the likelihood of cyberattacks significantly increases after a natural disaster. 

Insurance rates

Overall, insurance rates continue to rise. Natural disaster-related losses, “nuclear” liability verdicts, inflation, and state-specific regulations are all combining to affect carriers and their ability to adequately price risk. In 2025, the market was originally predicted to soften slightly, but the impact of recent catastrophic events at the start of the year may change those assertions.

Simply put, reinsurance is insurance for insurance companies. When insurers face large claims, such as those common after natural disasters, they rely on reinsurance to help cover those expenses, and the costs of reinsurance are factored into the premiums you pay.

Recently, Guy Carpenter, a global reinsurer and our partner company, reported some encouraging news. As of January 1, 2025, property catastrophe renewals that weren't affected by losses saw reinsurance rates drop by 5% to 15%. This decline indicates a growing capacity in the market, consistent underwriting practices, and a more balanced environment for insurers. So, while you may not be directly aware of reinsurance rates, they can influence your insurance premiums. A more balanced reinsurance market can lead to more stable rates for policyholders.

In 2024, there were nearly 30 severe weather or climate disasters that detoured residents’ lives across the U.S. These disasters caused losses exceeding $1 billion each in the U.S. and included severe storms, tropical cyclones, wildfires, floods, winter storms, and hail. Be on the lookout for these severe weather signs along your route:
 

First Street Foundation’s 2025 report highlights how these costly climate-related risks are impacting U.S. real estate, and their report predicts that home values could dip by $1.47 trillion over the next 30 years. As it stands, the Foundation says insurance costs are on the rise faster than mortgage payments.

If you'd like help navigating the challenging insurance terrain ahead of you, connect with our team's Risk Mitigation Leader, Brad Sawyer. Brad can help steer you, with his extensive expertise in risk management and insurance solutions tailored for high-net-worth individuals, to customized risk mitigation solutions that might be right for you and your properties. With a strong background in assessing and mitigating risks associated with severe weather events and other potential hazards, Brad is dedicated to helping clients protect their homes and assets while ensuring their long-term insurability.

Watch your speed: The law of large numbers

A hard insurance market is a reminder that insurance is based on the law of large numbers. When losses increase by frequency, severity, or both, the overall pool of premiums must increase to offset those losses. The simple fact that a policyholder was not directly impacted by a recent storm or other loss event does not solely determine the impact on their premium or insurability. For example, the year a property was built, its location, and its features are the biggest factors driving rates and insurability. So, while those with a higher risk profile will see the greatest impact, all homeowners in the state or region are still affected. 

States across the country are addressing insurance challenges unique to their region and rate increases through legislation. Select a card below to learn more about local legislation for each region. 

Our teams are known for exceptional service, and our claims advisors are no exception. 

One client of ours was driving an exotic SUV with a large moon roof in the Midwest, when a hailstorm rolled through, causing significant damage, shattering the glass moon roof and rendering the SUV unsafe to drive. Making matters worse, the local dealership said due to the exotic nature of the SUV it would be at least three to five months before they could source parts and begin work. Our client was facing the reality of being without their beloved vehicle for months, a long-term car rental, and the likelihood of exhausting the rental car allowance on their insurance policy.

Our claims advisory team kicked into high gear and was able to use our connections to the automobile repair and insurance industry to get the SUV transported to a factory-certified repair facility in Florida where the shop owner was immediately able to source backordered parts. Repairs were completed within three weeks and the SUV was delivered directly to the client’s home in the Midwest.

That is the commitment and passion our claims advisors bring to their work. Our claims advisory team is led by Robert Clemmons. His team provides claims advocacy and expertise to help you achieve the best possible settlement with your insurer. If you should ever suffer a covered loss, a dedicated claims analyst will be available to file a claim with your insurer on your behalf and provide support and guidance throughout the entire claims settlement process. Learn more about our claims process.