Climate events cause big jump in home insurance premiums

Due to climate events, some Marblehead residents say they have seen significant spikes in their home insurance premiums while others are having difficulty buying new policies. Nationally, many homeowners are being dropped by their home insurance agencies, according to a recent study commissioned by the U.S. Congress. 

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“We were paying $4,000, and suddenly it went to $7,000,” said Eileen Mathieu, who lives in the Clifton neighborhood. “We called our agent and she told us, ‘It’s because you’re coastal.’ But we live half a mile from Forest River and a mile from Preston Beach.”

Mathieu isn’t alone. Local Realtor and Select Board member Dan Fox said home insurance premiums are jumping 40-50% in some cases. The increase is largely due to climate events like wildfires, hurricanes and flooding across the country. 

“When people buy a new home, getting new insurance policies is very difficult,” Fox added. “Some of the standard companies flat out will not write policies if you’re within 2 miles of the coast. That’s pretty much everyone in Marblehead.”

Dropped policies

The congressional investigation, which the New York Times obtained last month, revealed that more insurance companies are dropping properties in areas with climate-related risks like flooding, wildfires and hurricanes. Massachusetts’ non-renewal rate was fifth highest in the country in 2023. The Cape and Islands were most impacted.

In Essex County, one in 64 policies were not renewed, a 31.9% increase over 2018. 

While numbers are not available specifically for Marblehead, local insurance agent Bill Garrity said there are still “plenty of carriers that are involved on the coast. Some have pulled back, mostly in Barnstable County, but not as much here in Essex County.”

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Garrity pointed out that Massachusetts has a robust state-backed insurance system, called FAIR, for homeowners who cannot get private insurance. 

Premiums spike

Garrity said home insurance premiums have jumped by up to 25% in the last couple of years due largely to national reinsurance companies that spread the cost of the risk across clients nationwide.

“There’s an upward track because of wildfires and catastrophes across the United States,” Garrity explained. “It’s really driven by what’s happening in other parts of the country. What happens in Texas, Florida and Kansas affects us here. It sucks up capacity in the reinsurance system.”

New floodplain maps for Marblehead

Currently, about 219 acres, or 1.7% of Marblehead, is in a FEMA flood risk area. In January, FEMA is expected to update its flood maps. The town will be required to modernize its bylaws within six months to stay in compliance.

“If you want to be part of the national flood insurance program, you have to have updated regulations,” explained Town Planner Alex Eitler.

Eitler plans to bring proposed bylaw changes to Town Meeting for approval in May.

“The big change is that there will be a new permit that will be required for development in the floodplain overlay district,” he said.

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Eitler added, “A lot of this is geared toward development. Flood plain districts often restrict or highly regulate development … for people’s safety and for environmental reasons.”

Fox advised people to get a home insurance quote before buying a new home.

“Look at that as part of the total cost, along with your mortgage and taxes,” he said. “It’s important to shop around to different brokerages and find the right fit.”

He added, “It’s also really important to look at the deal. Cheaper doesn’t always mean better.  Make sure that you look at the details — deductibles, wind coverage.”

Warning bell

Mathieu, who sits on Sustainable Marblehead’s board of directors, said the home insurance crisis is yet another example of climate change’s damaging impact.

“Whatever certain political figures might say about global warming, clearly the people who insure homes around the country are feeling the brunt of climate change and passing the cost along to consumers,” she said.

She added, “It’s the bell ringing. This is coming.”