'My cover is up 400%': Meet the Americans on the frontline of the country's home insurance crisis

Ken Brown is worried he is going to be forced out of his house if his home insurance premium continues to go up. 

The 71-year-old retiree who lives near Rapid City, South Dakota, has seen his annual cover with American Family skyrocket almost 110 percent in the last year - from $1,665 to $3,490.

Ken is on a fixed retirement income, while his wife Valeria, 68, is still working to help cover the insurance bill - and a whole host of other rising costs. 

Grim new forecasts say US home insurance rates will hit a record high this year - with the typical annual premium rising 6 percent to $2,522 by the end of 2024. 

But for Ken, and many others like him across the country, the reality is far worse - as they bear the brunt of an industry in crisis. 

To see the average price rises in your state, hover your mouse on a computer or point your finger on a smartphone on the graphic below...

Shock rises

In recent years, home insurance premiums have been climbing across the US.   

This has largely been driven by escalating natural disasters, insurers pulling out of certain states - which cuts down on competition - labor shortages and higher fees for home repairs. 

Soaring costs mean cover is becoming increasingly unaffordable for many Americans, and Ken is concerned that it is ultimately unsustainable. 

'I worry about next year, because they talked about how the increases are going to be the equivalent of what they were this year,' he told DailyMail.com. 

'If there's no relief in sight and they don't take it seriously, I'm going to be forced out of my house. We could get an apartment but that would only be temporary, and rents are also going up. We just don't know what we're going to do.'

The couple built the house for about $212,000 in 2004, and it has now been assessed to be worth about $417,000. South Dakota is seeing an influx of wealthy residents from Colorado and California, Ken said, which is pushing up the value of homes in the state. 

He has made no claims over the last year, and said American Family have also reduced what it will cover for hail damage on his home. 

'What upset me even more about the price increase is that there was no warning whatsoever - they never sent me an email,' he added. 

Ken thinks there needs to be some level of control over how much companies can push up premiums because of catastrophes. 

'Why should I pay more for my insurance because there are people who live on the Gulf Coast that sustain loss year after year? There has to be some level of control over the percentage increases per year or the government is going to have to get involved and underwrite a portion of their losses,' he said.

'Because otherwise people are going to be forced onto the street.'

American Family told DailyMail.com it is unable to discuss a specific customer's policy.  

Insurers pulling out of states 

Jeff Waack also thinks higher authorities are going to have to intervene if premiums keep going up.

'I hate everyone's insurance to go up but I believe that people have to pay more reasonably for what their probability of a disaster is. If you build next to a place that floods every year, then you should be paying more insurance for that,' he told DailyMail.com. 

'I pay a little bit more to help out everybody - that's fine. But not this craziness that has happened.'

Jeff is the board treasurer for a condo in West Hollywood which has 54 owners living in it.

This year, the building insurance quote went up from approximately $23,000 to $116,000 - a monumental 400 percent increase. 

'Our management company sent out proposals to 12 different insurance companies this year and every single one declined to give us a policy, including LIO Insurance which we had been with for the last four years,' Jeff said. 

California - as well as Florida - has seen insurers pull out of the state, while others have refused to renew existing policies. 

State Farm, California's largest insurance company, announced it would stop offering insurance to 72,000 homes last month due to the increased risk of natural disasters and the effects of inflation. 

'It's so upsetting and feels like such a slap in the face,' he said. 

'I don't understand why they would all of a sudden say you're not a good risk. We've paid our dues every year on time. If you want to raise our rates 5 or 10 percent, we could've dealt with that.'

West Hollywood is an urban area, and is not at particular risk of wildfires, hurricanes or flooding, Jeff added. He has lived in the building for decades, and says the last claim he remembers the board filing was 18 years ago.

As a last resort, the condo was forced to take coverage from a non-California admitted company, which means it sells policies which are not backed by the state.  

'I pretty much fell off my chair when I saw the price,' Jeff said. 'It feels like they just randomly picked a number that is high enough to really help their bottom line. They know they've got us over a barrel and we have to go for it.

'They could've said $200,000 and what would we have done? We didn't have a choice.'

A crumbling industry 

While premiums are rising across the country, some states are worse off than others. 

In particular, the home insurance crisis in Florida has intensified over the last several years as costly natural disasters have made it difficult for insurers to maintain profitability in the state.

More than a dozen home insurance companies have declared insolvency since 2019, major insurers have said they will not renew thousands of policies, and Farmers Insurance pulled out of the state entirely last year.

Hurricane Ian caused $109.5 billion in damage in 2022. This was the third most expensive disaster to hit the US and the most destructive in Florida's history, according to the National Oceanic and Atmospheric Administration (NOAA).

To fill the gap left by major carriers refusing to provide cover, state insurers of last-resort are increasingly becoming the only choice. In Florida, the state-run Citizens Property Insurance Corporation is now the largest in the state. 

'It's possible that the highest-risk areas will become uninsurable,' said Betsy Stella, vice president of carrier management and operations at comparison platform Insurify. 

'However, where there's demand, typically a supplier will appear. The question will be, at what cost?' 

Finance guru Suze Orman told DailyMail.com earlier this year how she has given up on cover for her ocean-side condo in Florida after she was quoted $28,000 a year by her insurer.

The financial advisor and author owns her Florida condo outright - meaning she was able to give up on the cover.

She said: 'I'm not paying $28,000 a year when the insurer will probably contest any claim I get anyway. Luckily, I have the money to self-insure. $28,000 for a 2,100-square-foot condo. Are you kidding me?'

According to a recent report from the Consumer Federation of America, over six million homeowners do not have homeowners insurance - which amounts to around $1.6 trillion of unprotected value.

What can you do to reduce your premium?

The cost of cover is up due to the losses insurance carriers have experienced from hurricanes, wildfires, tornadoes, and floods, explained Greg McBride, chief financial analyst at Bankrate.

The way insurance is regulated, insurers usually have to get approval from the state to raise premiums, but when massive disasters come along that typically means insurers take huge losses first and then have to raise premiums to recoup that, he said. 

But there are steps you can take to potentially lower your premium.  

McBride recommends shopping around among various insurance carriers to compare prices and see if you can get a better deal. 

'Keep in mind that "better deal" may still mean a higher premium than what you paid last year, just not as high as your existing carrier,' he said. 

Increasing your deductible might help mitigate the increase somewhat, he added. 

A deductible is a fixed amount of money you pay out of pocket for damages to your home before your insurance pays the rest.

Most homeowners insurance policies have a minimum $1,000 deductible. 

But McBride warns that unlike auto insurance where increasing your deductible can have a more noticeable impact on your premiums, with homeowners' insurance you often need to shoulder a lot more risk before you see much impact.

'Be sure to notify your insurance carrier if you've recently made upgrades that can reduce the risk of loss - a new roof or impact glass windows in hurricane zones, for example,' he added.