‘You Could Lose Your Home’

Many Americans are going without homeowners insurance, simply because they can no longer afford it. But this move can have devastating financial consequences, especially with extreme weather events on the rise.

Uninsured homeowners may be responsible for most, if not all, costs incurred during disasters, thefts, and accidents in or around their homes. Plus, if you have a mortgage, your mortgage company can force you to pay for expensive insurance they buy for the home. In extreme cases, you could lose your home.

Why People Are Skipping Homeowners Insurance

The cost of homeowners insurance has gone up dramatically in recent years. Annual premiums for a typical U.S. homeowner increased by an average of $648 (or 24%) between 2021 and 2024, according to the Consumer Federation of America (CFA). 

Some residents can’t get coverage at all. In hard-hit areas of Florida, California, and North Carolina, for instance, some insurers have stopped issuing new policies and are no longer renewing old ones, leaving residents with little to no coverage options.

The lack of availability and exorbitant price tags, mainly attributed to climate change, inflation, expensive reinsurance, and weak regulatory oversight, are forcing Americans to forego coverage.

A Growing Trend?

Per a recent report from the Federal Reserve, 7% of U.S. homeowners didn’t have homeowners insurance in 2024, with 43% claiming they couldn’t afford a policy and 19% believing coverage wasn’t worth the cost.

The CFA—which similarly found last year that over 6 million homeowners lack homeowners insurance—expects this trend to continue.

“We are seeing early indications that the share of uninsured homeowners is going up, especially in places such as Miami,” said Michael DeLong, research and advocacy associate from the CFA. “However, this trend has not yet appeared in the national data.” 

The Consequences of Going Uncovered

Going without homeowners insurance poses significant risks to your financial stability. For starters, it leaves you on the hook for most, if not all, disaster-related property damages.

“You can get some assistance and aid from FEMA [the Federal Emergency Management Agency] and state agencies, but it is usually not enough to cover the costs,” said DeLong.

You’re also vulnerable to non-disaster-related expenses. Standard homeowners insurance not only covers property damage amid catastrophes. It also covers your belongings, additional living expenses when displaced from your home, and personal liability for injuries or damage caused by you or your family members. Without insurance, those costs are all on you. 

Additional Risks for Mortgage Holders

Going without homeowners insurance becomes even more precarious if you have a mortgage. Lenders typically require you to have a policy in place to protect their investment, and the lack of a policy technically puts you in violation of your mortgage agreement.

If you don’t have homeowners insurance, the lender may charge you for force-place insurance instead. Also known as creditor-placed insurance, this coverage is added to your mortgage payment. It’s pricey and usually only covers what you owe your lender. Because force-place insurance is so expensive, it may make your mortgage payment unaffordable and put you at risk of losing your home.

“If you couldn’t afford insurance privately, it’s likely that the increase in the mortgage payment creates additional financial pressure,” said Ted Patestos, CEO and founder of Tiger Adjusters. “This can lead to an increase in default or late mortgage payments and, ultimately, foreclosures. It’s a real problem.” 

What To Do if You Don’t Have Affordable Home Insurance

If you’ve been dropped by an insurer because your home is considered too high of a risk, or you just don’t see how you can afford home insurance, here’s what you can do:

Shop Around 

Some insurers are less risk-averse than others, and a few specialize in covering high-risk homes.

“Look around and get quotes from different companies,” DeLong said. “Even very limited homeowners insurance coverage is better than no coverage.”

Consider a FAIR Plan

Thirty-three states currently have a Fair Access to Insurance Requirements (FAIR) plan, a state-sponsored policy available to people who can’t get coverage from a private insurer.

“This is a policy of last resort and is not as robust as a standard homeowners policy, but it does provide some protection,” said Chris Januski, insurance specialist and president at JWI Group, Inc.

Implement Mitigation Measures

In a best-case scenario, risk-centric home improvements—like fortifying your roof or installing impact-resistant windows—could compel an insurer to issue or reissue your policy. In a worst-case scenario, where you still can’t find coverage, these measures will at least provide some protection for your home. 

Have a Savings Plan

If you don’t have a mortgage and can technically self-insure, take steps to get to a place where you can comfortably cover disaster-related and other property expenses.

“This might look like starting a separate account with a high yield on it and contributing monthly,” Patestos said.

The Bottom Line

The high price of home insurance is causing many Americans to skip coverage, but that move carries its own financial risks. If you don’t have a policy, you’ll have to pay for all property, theft, and accident damage in or around your home. And, if you have a mortgage, you can run into issues with your lender. Fortunately, there are places to find at least some coverage, including high-risk private insurers and state-sponsored FAIR plans. If you’re completely shut out, consider implementing risk-focused home improvements and setting up a special savings account for home-related expenses.