NJ Homeowners Face Insurance Hikes, Lost Coverage

NEW JERSEY — A recent federal report details how more and more New Jersey homeowners are seeing their insurance premiums go up, or losing their coverage entirely, as climate-related risks increase.

And around the country, people living in coastal states and high-risk wildfire areas are being dropped from their insurance carriers, according to the Senate Budget Committee report.

This threatens families' abilities to afford coverage, not to mention getting a mortgage if coverage isn't available, the Committee said in its report "Next to Fall: The Climate-Driven Insurance Crisis is Here—And Getting Worse.”

The report warns that the country may be headed for a "systemic shock to the economy," on par with the 2008 financial crisis, if high premiums and unavailable coverage persist in certain communities.

"As climate change gets worse, so does trouble in insurance markets, threatening mortgage markets and property values," the Senate Budget Committee wrote. "If those homes become uninsurable and unmarketable, the values of the homes will plummet."

Higher premiums, higher non-renewal rates

Nationwide, more than 1.9 million people have been dropped from their policies nationwide since 2018, the report said. The growing insurance crisis is an issue beyond the states typically thought to be at the "front lines" of climate change risk, such as Florida, California, and Louisiana.

Data shows that "areas such as southern New England, parts of Montana, coastal and inland North Carolina, coastal regions of New Jersey, New Mexico, South Carolina, and even Oklahoma, among others, are not far behind," the Committee wrote.

The study found that areas with higher insurance premiums are also likely to have higher non-renewal rates.

New Jersey saw the 8th-highest rise in the rate of non-renewals from 2018 through 2023 — an increase of 69.54 percent, according to the report.

Cape May, Hudson, and Atlantic counties were among those with the highest non-renewal rate changes in the country during that time period.

Overall in 2023, New Jersey's rate of non-renewal was 0.8 percent, which was the 35th highest in the nation. County-by-county rates of non-renewal in 2023 are as follows:

• Atlantic County: 1.13 percent
• Bergen County: 0.8 percent
• Burlington County: 0.61 percent
• Camden County: 0.63 percent
• Cape May County: 1.45 percent
• Cumberland County: 0.78 percent
• Essex County: 0.93 percent
• Gloucester County: 0.54 percent
• Hudson County: 1.04 percent
• Hunterdon County: 0.69 percent
• Mercer County: 0.7 percent
• Middlesex County: 0.78 percent
• Monmouth County: 0.91 percent
• Morris County: 0.76 percent
• Ocean County: 0.91 percent
• Passaic County: 0.76 percent
• Salem County: 0.73 percent
• Somerset County: 0.77 percent
• Sussex County: 0.7 percent
• Union County: 0.77 percent
• Warren County: 0.62 percent

The Committee gathered data from 23 of 41 private insurance companies in the U.S. for this analysis, and estimated that the report accounts for about 65 percent of the national homeowners’ insurance market.

Read the full report here.