Millions of US Homeowners Issued Insurance Warning
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Millions of U.S. homeowners are unprepared for extreme weather, a new survey by Guardian Service suggests, with insurers warnings of the costly impact of complacency.
The U.S. experienced a near-record number of climate-related disasters in 2024, at an average of nearly one every four days, according to a study by the International Institute for Environment and Development (IIED). Despite the billions of dollars in damages caused by natural disasters annually, the Guardian Service survey suggests many homeowners still tend to underestimate or avoid the challenge they are facing.
Forty percent of homeowners interviewed by the insurance agency said they are "well" or "extremely" prepared for an extreme weather event—but as many as 33 percent have taken no action whatsoever to protect their home, not even reviewing their coverage.
Brittany Wooden and her family look on at the neighborhood her grandmother lives in, Allen Circle, where homes are underwater after excessive rains caused flooding on August 7, 2024, in Statesboro, Georgia.
Brittany Wooden and her family look on at the neighborhood her grandmother lives in, Allen Circle, where homes are underwater after excessive rains caused flooding on August 7, 2024, in Statesboro, Georgia.A majority of homeowners don't have enough funds to weather a storm should their insurer not cover the damage incurred to their properties. 61 percent said they would rely on credit cards, loans, or family support to pay for weather-related home damage, while more than one-third (36 percent) currently have less than $1,000 saved for home emergencies.
Many showed crucial gaps in their knowledge of how home insurance works. Forty-one percent mistakenly think flood damage is covered under a standard policy, and 68 percent don't know what a "named storm" deductible is.
The survey was conducted among 2,000 U.S. homeowners on June 6—just days into this year's hurricane season, which forecasters said is very likely to be above average. While the survey is just a snapshot of the nation, it implies millions of Americans are taking considerable financial risk.
Confidence Without Readiness
The findings haven't surprised experts. Instead, they confirmed a pattern they have observed before of "confidence without readiness," as Kara Credle, a licensed insurance agent at Guardian Service, called it.
Many homeowners believe they are prepared, but they haven't taken action to steady their homes ahead of a natural disaster.
"People often underestimate their risk, especially if they haven't personally experienced a major disaster," Credle told Newsweek. "There's a widespread belief that 'it won't happen to me,' which leads to complacency."
Additionally, Credle said, many homeowners don't really know what steps are needed to be truly prepared for their homes being struck by an extreme weather event.
"Emergency planning, structural reinforcements, and policy reviews aren't part of everyday conversations, so people tend to delay or ignore them. In some cases, the information is available, but it's confusing or too technical, making it hard to act on," Credle explained.
An 'Outdated' Sense Of Safety
The survey found that nearly half of all homeowners (46 percent) who had not taken any protective steps believed their homes were not at risk because they lived in a safe area of the country. But with the climate crisis changing the traditional rules of the game, this assumption is "increasingly dangerous and outdated," Credle said.
"The weather no longer sticks to predictable zones. Relying on old assumptions leaves homeowners vulnerable. Skipping insurance reviews or home upgrades because 'it probably won't happen here' can turn into a very costly mistake," she added.
"Today, being prepared means taking action ahead of time. It's not about whether something will happen anymore; it's about when."
Dr. Shane Crawford of the University of Alabama said that, "although some areas are more at risk for certain types of natural hazard, there is no area in the country with zero risk."
The West Lags Behind
Across the U.S., most homeowners feel least prepared to face earthquakes (44 percent), tornadoes (37 percent) and wildfires (35 percent).
The least prepared homeowners in the entire nation are concentrated in the West, according to the Guardian Service survey, despite the fact that they face some of the most serious natural disaster threats in the nation—wildfires, earthquakes, floods, and even mudslides. Forty percent of them feel they are unprepared for earthquakes, 39 percent said they are not ready to face tornadoes, 29 percent said they are not ready for wildfires and 28 percent are unprepared for hurricanes.
"One big reason is that disaster risks out West are complex and often overlapping, which can make it overwhelming to know where to start," Credle said.
Another challenge, she added, is that earthquake insurance is not normally included in standard home policies, forcing homeowners to either add an endorsement to cover earthquake damage—which would likely raise their premium—or buy an entire earthquake policy separately.
"Many homeowners either don't realize this or assume it's too expensive to be worth it," Credle said. "Insurance availability is also shrinking in high-risk parts of the West, especially areas prone to wildfires."
Several major insurers have pulled out of the California market over the past five years, or raised their premiums, according to data from regulators, leaving homeowners scrambling for coverage or forcing them into much more expensive options.
Homeowners in the Midwest feel least prepared for earthquakes (42 percent), hurricanes (40 percent), wildfires (38 percent), tornadoes (36 percent) and flooding (20 percent). Those in the Northeast feel least prepared for earthquakes (51 percent), tornadoes (46 percent), wildfires (35 percent), hurricanes (27 percent) and flooding (24 percent).
Homeowners in the South feel least prepared for earthquakes (42 percent), wildfires (36 percent), tornadoes (31 percent), hurricanes (29 percent), flooding (24 percent) and winter storms and blizzards (24 percent).
What Risks Do Unprepared Homeowners Face?
Being unprepared for extreme weather can be financially tough, forcing homeowners to take out money they don't have for repairs—especially if they find out their insurance won't cover all their losses.
"Many people don't realize that standard policies often don't cover flood damage, and some deductibles are based on a percentage of your home's value—meaning you could be on the hook for thousands before coverage even kicks in," Credle said. "And it's not just about money. The stress of losing your home, dealing with insurance delays, or being displaced for weeks or months takes a serious emotional toll."
According to a recent study by the Insurance Information Institute and reinsurance company Munich Re, about 88 percent of U.S. homeowners have property insurance, but only about 6 percent have flood coverage. A majority of those who have flood insurance are concentrated in the most at-risk coastal areas, but experts said that the threat of flooding is hardly limited to these parts of the country.
"Lack of flood coverage is the biggest insurance gap across the country," Mark Friedlander of the Insurance Information Institute previously told Newsweek. "As we saw last year with Hurricane Helene, inland flooding can be catastrophic from a landfalling hurricane. Ninety percent of U.S. catastrophes involve flooding," he said. "This is why flood insurance is essential for all residents, not just in coastal communities."
Tom Larsen, AVP of product marketing for insurance at Cotality, previously told Newsweek that this hurricane season the U.S. is facing the threat of "wind damage from hurricane-force winds threatening tens of millions of properties" and storm-surge flooding "that could inundate more than six million homes," as well as washed-out roads, disabled municipal water systems and overwhelmed power and wastewater networks in affected states.
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