Despite no landfalling hurricanes in the U.S. this season, homeowners insurance premiums continue to climb nationwide as insurers face mounting costs from billion-dollar weather disasters, replacement cost inflation and legal system abuse, Triple-I CEO Sean Kevelighan explained during a live interview with AccuWeather Early last week.
Conversation Highlights
Why insurance rates keep rising: Kevelighan said homeowners replacement costs have increased by nearly 30% over the past five years due to supply chain disruption, escalating costs of construction materials and labor shortages.
- “Now we are also starting to see the impacts of tariffs,” Kevlighan added.
Impact of 2025 disasters: Kevelighan explained the first three months of 2025 established a first-quarter record for insured losses due to the estimated $4o billion Los Angeles fires in January and several severe convective storm events. This is a primary reason why the property/casualty industry will surpass $100 billion in catastrophe losses for the sixth consecutive year.
- “For every dollar of premium we took in, we paid $1.11 in claims and expenses in the first quarter,” Kevelighan said.
Legal system abuse impacts: “Over the last 10 years in particular, we have seen extraordinary legal system abuse. Americans are going to litigation first instead of a last resort and that is driving up insurance costs for everyone,” Kevelighan said.
Florida market recovery: “Florida has seen over nearly 20 new insurance companies returning to the state over the last three years and better rates following legal reforms that addressed excessive litigation,” Kevelighan said.
California risk crisis: Kevelighan explained California’s risk crisis is due to property insurers unable to get the rate they need because of regulatory restrictions.
- “It’s unfortunate insurers pulled back on California because of the regulatory environment, especially when you consider the state is one of the largest economies in the world,” Kevelighan said.