A report from Climate Cabinet and the Insurance Fairness Project recommends that state policymakers adopt reforms modeled on successful measures in other states to address the growing homeowners insurance crisis driven by rising climate risks.
According to the report, state governmental interventions on insurance have largely been deregulatory to date. It urges policymakers to learn from counterparts in other states for effective interventions. The report highlights Colorado’s 2025 reform as a significant development that requires insurers to account for wildfire mitigation at property, community, and state levels in risk assessment and premiums. It also mandates transparency in catastrophe and wildfire risk models, including details on methods and rate impacts.
In Colorado, homeowners insurance premiums have risen following events like the Marshall Fire in 2021, with some insurers limiting coverage due to wildfire risk. The state passed a 2025 law requiring insurers to factor in wildfire mitigation efforts when setting rates and to disclose details about risk models used. Colorado faces challenges as a dual-catastrophe state with wildfires and hail contributing to rate increases. Average premiums reached higher levels due to these natural hazard dynamics.
Florida enacted comprehensive insurance and tort reforms in 2022 and 2023, including changes to litigation rules, faster claims processing, and elimination of certain attorney fee provisions. These reforms contributed to market stabilization, with Citizens Property Insurance announcing an average statewide premium reduction of 8.7% beginning in spring 2026, affecting over 330,000 policyholders. Multiple private insurers filed rate decreases or zero increases, reflecting improved confidence and reduced litigation.
Climate Cabinet is an organization focused on financial strategies to address climate-related challenges, including insurance market impacts from extreme weather. The Insurance Fairness Project advocates for fair insurance policies and reforms that benefit consumers amid rising risks. Together they produce reports analyzing state-level insurance interventions and recommending stakeholder-inclusive approaches to improve affordability and access. Their work supports practical solutions for homeowners facing climate-driven insurance issues.
