# When Homeowners Insurance Disappears: The Growing Cost of Climate Risk

1 Research Highlights September 3, 2026 ![Headshots of Mary Billings and Stephen Ryan](/sites/default/files/styles/246w/public/2026-09/billings_ryan_research.png?itok=FomhDgJF)**Overview**: In “[Climate Risk and Homeowners Insurance Non-Renewals: Real Effects on Foreclosures and Local Economies](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7273638),” NYU Stern Professors [Mary Billings](https://www.stern.nyu.edu/faculty/bio/mary-billings) and [Stephen Ryan](https://www.stern.nyu.edu/faculty/bio/stephen-ryan), with co-author Han Yan (University of British Columbia), examine what happens when insurers stop renewing homeowners’ policies in climate-risky areas. They find that insurance non-renewals can trigger a broader economic cascade, from higher foreclosure rates and falling home values to weaker local retail activity.

**Why Study This Now**: As wildfires, hurricanes, and other climate-related disasters become more costly and unpredictable, homeowners face not only rising premiums but also the possibility of losing coverage altogether. The issue is increasingly urgent: more than 2 million homeowners insurance policies were not renewed by insurers in 2024, according to a new nationwide analysis from the National Association of Insurance Commissioners. Because mortgage contracts generally require hazard insurance, losing coverage can put homeowners at risk of losing their homes.

**What the Authors Found**: Using US county-level data from 2018–2023, the researchers find:

- A one percentage point increase in insurance non-renewals is associated with a **0.91 percentage point increase in the foreclosure rate.**
- The same increase is associated with an **8.3% decline in average single-family home values**, with an even larger **16.5% decline for lower-value homes.**
- Local retail sales fall by **8.6%**, while homeownership also declines.
- The effects are particularly pronounced in communities with more socially vulnerable populations.

**What Does This** ***Change***: The findings suggest that maintaining access to homeowners insurance – not simply keeping premiums affordable – should be a central policy concern. Efforts to limit insurance prices may backfire if they cause insurers to withdraw from high-risk markets altogether.

**Key insight**: “When homeowners lose access to insurance, the consequences don’t stop at the insurance market,” explain the authors. “They can spill over into foreclosures, home values and local spending. Our findings suggest policymakers need to think not only about the affordability of insurance, but also about preserving access to coverage.”