New York Senate Examines Rising Home Insurance Costs and Market Stability

The New York State Senate recently held a hearing addressing the rising home insurance premiums and increased policy cancellations affecting homeowners in New York and across the U.S. Although New York's average homeowners insurance premium remains below the national average, rates have increased significantly due to inflation, risk modeling challenges, more frequent natural disasters, and social inflation. These factors contribute to a tightening market that is increasingly unaffordable and less accessible for many homeowners. The hearing featured testimony from over 30 experts and public officials who highlighted the impact on consumers, including rising rates by over $1,000 in some cases since 2020 and the fact that nearly 500,000 New York homeowners are uninsured. Industry reports showed that despite high catastrophe losses in 2025, the property and casualty insurance sector recorded strong underwriting gains, underscoring a market environment where risk is being redistributed and premiums are rising independently of claims histories. Contributing factors to rising costs include the increased frequency and severity of natural catastrophes, inflation-driven construction and repair costs, and a tightening reinsurance market. The DFS cited data showing a 45% rise in claims costs over the past decade, coupled with increasing claim severity and litigation expenses impacting insurers’ risk calculations. Replacement costs for property losses have also risen by an average of 4% annually from 2020 to 2023, further driving premium increases. Regulatory efforts include legislation preventing insurers from considering a homeowner's income or housing type when underwriting and encouraging insurers to offer discounts for loss mitigation measures like hurricane-resistant materials and smart home devices. The New York Department of Financial Services (DFS) aims to promote market stability, affordability, and accessibility by enhancing transparency, rate-setting fairness, and community resilience. Stakeholders emphasized that while the situation is not yet a crisis, the trend demands proactive measures to prevent worsening market conditions. This includes stronger state oversight and incentives for risk mitigation that can help sustain the residential property insurance market amid evolving risks. The hearing reflects broader national challenges in balancing underwriting profitability with consumer protection in a changing risk environment.