Homeowners insurance is important for a number of reasons. First and foremost, it can help protect your home and belongings when emergencies happen. This can include fires, storms, theft, and other unexpected events. It can also cover liability costs in the event that someone is injured on your property.

But even though homeowners insurance is so important, it is becoming harder and harder to obtain. According to experts, the reasons behind this boils down to three problems: climate change, expensive repair costs, and increase reinsured premiums.

Climate Change

So far this year, California has been on the receiving end of over 1,200 wildfires. And even though that number is concerning, it is still about half of the total wildfires recorded in the first five months of 2022.

But even though the number of wildfires is on the current decline, experts believe that that number is set to increase later this year. This is because the more recent heavy rainfall has played a heavy part in growing vegetation. And though this can appear beneficial, this new vegetation can dry out as the weather heats up, causing dreaded wildfires.

Aside from the Golden State, wildfires are also set to increase across the globe. A report from the UN Environment Programme states that by 2030, the number of extreme wildfires is expected to increase by up to 14%, according to CNN. And to make matters worse, this increase is set to reach 30% by 2050.

Increased Reinsurance and Repair Costs

According to insurance experts, the cost to rebuild or repair homes more than doubled (55%) between 2019 and 2022. JMP Securities industry analyst Matthew Carletti states that rising costs have also impacted reinsurance, which increased between 30% and 40%. “If you are a reinsurer, you have lost money for the last five years.”

But why, you ask?

An increase in natural disasters is a big enough reason for reinsurers to drive up premium costs. This is especially damaging in states such as California or Florida, where hurricanes and wildfires can happen more frequently.

But according to the Consumer Price Index, even though premiums are on the up and up, they have only risen 1.6% within the last year. Still, homeowners may find themselves between a rock and a hard place if they live in uninsurable areas, with rates crossing over into the double digits.