Polluters Get A Pass As Working Families Foot The Bill For Ignored Climate Risks
WASHINGTON, DC – A Washington Post investigation published today finds that as traditional insurers retreat from the states most exposed to extreme weather, homeowners are increasingly forced onto unregulated “surplus lines” policies that offer weaker consumer protections, less oversight, and abysmal payouts, if any, when claims are filed. Nationwide, premiums written through surplus lines have nearly tripled in five years, from $1.5 billion in 2021 to $4.1 billion in 2025, with growth concentrated in California, Florida, Texas, and South Carolina.
In California, surplus lines premiums grew tenfold since 2021, from $135 million to nearly $1.3 billion, now making up 7% of all homeowners premiums in the state. In Florida, where lawmakers eliminated a requirement that agents first make a “diligent effort” to place homeowners with regulated insurers, surplus lines in the homeowners market grew 74% between 2020 and 2025 to $888 million. These policies come with a real cost to consumers: surplus carriers paid out just 36 cents in claims for every premium dollar collected over the past five years, compared with 58 cents for regulated insurers, and unlike standard policies, surplus coverage carries no state guaranty fund protection if the insurer becomes insolvent.
“Homeowners are being pushed onto policies that cost more, cover less, and can vanish overnight if the company goes under. This is the direct result of policies that allow traditional home insurers to cherry-pick coverage and dump high-risk perils onto the surplus market, forcing policyholders to assume the risks while insurers profit,” said Jayson O’Neill, spokesperson for Unlocking America’s Future. “Republican politicians keep handing insurers new ways to avoid basic oversight instead of fixing a market that’s failing families. Every dollar an insurer collects without contributing to guaranty funds or resilience programs is a dollar homeowners will have to make up themselves when the next disaster hits. Regulators and elected officials have a roadmap for fixing this. They should use it.”
A companion report released this month by Climate Cabinet Education lays out what elected officials and regulators should be doing instead. The report calls for requiring surplus carriers to contribute to state guaranty funds and roof fortification programs, closing gaps that let surplus insurers avoid the financial exams and capital requirements applied to regulated carriers, and mandating public disclosure of surplus lines data on premiums, denials, and claims outcomes.
Instead, the report exposed how Florida Republican lawmakers moved in the opposite direction this year, expanding the surplus lines market’s role in the state’s insurance system even as regulators warned it would leave homeowners with fewer protections. Similarly, the surplus line provider, Slide, who made headlines for handing out a $50 million bonus to its CEO, recently expanded surplus coverage offering to Californians. Slide Insurance announced it had doubled its income in the second quarter this year.
UAF continues to call on elected officials and insurance regulators to adopt the needed reforms to protect consumers, including those outlined in the Climate Cabinet Education report, like guaranty fund contributions from surplus carriers and mandatory public data disclosure, before more homeowners are forced into coverage with fewer protections and higher costs. Democratic elected officials in Texas and North Carolina are considering surplus line legislative reforms to help protect homeowners.
Email jayson@focalpointstrategygroup.com to set up interviews with ratings, legal, advocacy, and insurance experts.
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