Insurance costs climbing, policies canceled as crisis spreads amid Trump’s chaos

President Donald Trump’s tariffs are adding $10,900 to the cost of a new home, but rising insurance premiums have put another burden on working-class families struggling to attain the American Dream.

A curious thing is happening across this great land of ours, a quiet tremor beneath the foundation of the American home. It begins not with a crash of timber, but with the rustle of a bill arriving in the mailbox.

In suburbs from the Jersey Shore to the California coast, families are opening letters that tell a disquieting tale: the cost of keeping a roof over one’s head is rising, not just from the price of shingles and nails, but from the very paper promise meant to protect them.

A nationwide crisis in homeowners insurance is unfolding, driven by the fierce winds and burning droughts of a changing climate, and amplified, a new report contends, by the political choices of those in power.

The facts, as they say, are stubborn things. Since 2021, the property insurance landscape has undergone a profound shift.

At least six million policyholders have seen their premiums rise, while insurers have outright canceled 1.4 million policies.

The companies point an unwavering finger at the cause: extreme weather and climate disasters, which they cite as the reason for more than one in four of these cancellations, rate hikes, or decisions to halt new business.

The cancellations are not confined to postcard beaches; in 2024, Pekin Insurance canceled 40,000 policies in Iowa, citing “severe and erratic weather patterns.”

The retreat is national, but the pain is local. In Florida, 858,672 policies have been canceled. In California, 392,301. Louisiana saw a state-approved rate hike of 63% for its insurer of last resort.

And where does New Jersey, our Garden State, fit into this gathering storm?

The report notes that since 2021, the state has experienced at least one major rate hike, reaching 12.9%.

While this figure may seem modest compared to the Gulf Coast, it is a leading indicator, a signal that the financial waves from distant disasters lap at our own shores.

The underlying risk—the increased frequency of severe coastal storms and flooding—is a familiar specter here, and the insurance industry’s national recalculation does not stop at state lines.

Now, here arrives the knotty part of the tale, the twist that turns a story of nature into one of commerce and politics.

While implementing these cancellations and increases, the very same insurance industry has recorded profits of a magnitude that borders on the astronomical.

In 2024, 22 publicly traded insurance companies reported profits exceeding $36 billion.

Their chief executives were rewarded with total compensation surpassing $220 million.

To put a fine point on it, the CEO of Allstate, which raised rates by 34% in California, received $26.7 million.

The report paints a picture of an industry managing a retreat from risk while consolidating immense financial gain.

This brings us to the crossroads where finance meets federal policy. The report from Climate Power draws a direct line, alleging that the insurance industry has furnished more than $3.7 million to the political campaigns and inaugural committees of former President Donald Trump.

This financial support, the argument goes, flows to an administration whose policies are projected to worsen the affordability crisis.

The chief mechanism identified is the imposition of tariffs, which are expected to increase the cost of construction materials.

These costs, inevitably, are passed through the economy, resulting in higher repair and rebuild expenses after disasters, which in turn fuel higher insurance premiums.

The National Association of Home Builders estimates these tariffs could add $10,900 to the cost of a new home.

Furthermore, the report warns that proposed deep cuts to federal disaster recovery programs and threats to agencies like FEMA would remove critical backstops.

As one insurance association executive testified, without government support for mitigation and response, homeowners will bear the full brunt of the cost through their premiums.

In essence, the analysis suggests a cycle: industry profits surge while consumer costs rise, and political contributions align with policies that may accelerate both trends.

So, what is a New Jersey homeowner to make of this? The view from here suggests we are witnessing a fundamental restructuring of a quiet pillar of the American dream.

Insurance is no longer a stable, predictable facet of homeownership but a frontline in the economic reckoning of climate change.

The policy cancellations in California and Florida are a warning, not an anomaly. The rate hike in New Jersey is an early chapter, not the conclusion.

The question that hangs in the salt air off Long Beach Island is not merely about next year’s premium, but about what kind of future we are building—and insuring.

It is about whether the contract between a family and their security can withstand the pressures of a warming world and the calculations of a profitable industry.

The bills in the mail are more than statements; they are dispatches from that uncertain front. And that, for the moment, is how the story stands.