Many homeowners neglect active management of home insurance despite rising extreme weather risks

Hurricane Helene is the latest storm to cause significant damage in the South, affecting five states and resulting in at least 21 deaths. President Joe Biden has approved emergency declarations for Georgia, Florida, Alabama, North Carolina, and South Carolina.

This event adds to a series of extreme weather incidents in the U.S., where nearly half of homes are at risk. Despite this risk, many homeowners are not actively managing their insurance coverage. According to a Lexus-Nexis Risk Solutions report, almost half of homeowners let their policies renew automatically or rely on agents without understanding the details.

The report identifies these individuals as "Set It and Forget It" homeowners. These policyholders tend to bundle home and auto insurance and pay premiums automatically but often lack knowledge about their policy specifics. The report warns that this complacency can leave them underinsured: “Homeowners with the Set It and Forget It mentality are complacent about their home insurance coverage.”

Only 48% of these homeowners express concern about needing to use their insurance, and just 37% know their policy details. In contrast, there were 28 weather and climate disasters in 2023 alone with losses exceeding $1 billion each.

Steve Leasure from Rainbow Restoration emphasizes the importance of awareness: “Extreme weather could affect any homeowner, whether it be floods, tornadoes, or wildfires.”

Homeowners in high-risk states like Florida, California, and Texas are more engaged with their insurance coverage. These "Insurance Involved" individuals represent 37% of respondents who actively review policies and shop for better options. Among them, 59% are highly concerned about using their insurance.

However, some Floridians remain uninsured due to high costs or dropped coverage by carriers. Realtor.com’s Hannah Jones notes: “Climbing housing and insurance costs have pushed some homeowners to forgo homeowners insurance coverage.”

The report also indicates a growing disconnect between consumers and insurers due to rising premiums and reduced coverage. Only 42% believe their rates are fair as national home insurance rates rose by 11.3% in 2023.

Despite mistrust between carriers and customers, 70% of homeowners still rely on insurers or agents for appropriate coverage.