Finance
Millions of homeowners don’t have homeowners insurance due to high costs
7.4% of all homeowners have opted not to have insurance to protect their home. (iStock)
Homeowners insurance is required in many states, particularly when you have a mortgage, but not every homeowner has the insurance they need. More than six million homeowners in the U.S. don’t have homeowners insurance, according to a Consumer Federation of America (CFA) report.
An estimated 7.4% of all homeowners are uninsured throughout the country, leaving $1.6 trillion in assets unprotected, the report found. The high cost of homeowners insurance is causing homeowners to go without insurance.
“Many consumers are struggling to afford rising premiums and must go without homeowners insurance,” CFA Director of Housing Sharon Cornelissen said in the report.
Homeowners with lower earnings are more likely to avoid getting insurance. Those who earn under $50,000 are twice as likely to lack adequate coverage or coverage at all.
Additionally, certain demographic groups forgo insurance more than others. Among Native American homeowners, 22% don’t have insurance, 14% of Hispanic homeowners go without insurance and 11% of Black homeowners have no insurance. Homeowners living in the Houston and Miami areas were also more likely to be uninsured, according to the report.
“That [not having insurance] puts them at risk of losing everything. One storm or wildfire means they have to go into deep financial debt to repair their home, live with unsafe and inadequate housing, or even become homeless,” Cornelissen said.
To find homeowners insurance that actually fits your budget, consider using Credible’s marketplace to compare rates in minutes.
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Legislation could cut homeowners insurance costs
Due to the homeowners insurance crisis plaguing the country, certain states are trying to get legislation passed to lower insurance rates.
In Florida, particularly Broward County, a commissioner is seeking to pass legislation that would lower rates for Floridians by as much as 25%. Florida has some of the highest premiums in the country due to more frequent natural disasters and higher rates of fraud.
The legislation, originally introduced by Rep. Jared Moskowitz is titled the Natural Disaster Reinsurance Plan. Since Florida is significantly impacted by natural disasters, this program could save homeowners hundreds in monthly insurance premiums. If passed, the legislation would help Florida and other states that choose to opt-in scale back the need for insurance companies to purchase reinsurance from other providers.
In short, companies buy insurance from outside companies to protect themselves from risk and pass on the higher premiums to homeowners. The bill would limit this need, saving insurance companies money, as well as those they insure.
If you need a new insurance company, Credible can help you compare rates from multiple companies, potentially saving you hundreds on homeowners insurance each year.
NORTH CAROLINA’S INSURANCE RATES HIKE DENIED, RATES IN OTHER STATES STILL RISING
Auto insurance rates also skyrocketing
Drivers in most states are also seeing their monthly premiums reach all-time highs. The motor vehicle index portion of inflation rose 0.9% in February, the Bureau of Labor Statistics reported.
Over the last year, the index increased by 20.6%, indicating a spike in auto insurance costs for the entire country. The rising cost of used cars and trucks added to this index increase. Its own index increased by 0.5% from January to February.
Last year, 31% of drivers saw their car insurance increase, J.D. Power found. Rates increased 15.5%, on average, largely due to substantial losses insurance companies faced.
“Overall customer satisfaction with auto insurers has plummeted this year, as insurers and drivers come face to face with the realities of the economy,” said Mark Garrett, J.D. Power director of insurance intelligence.
Drivers are growing increasingly frustrated with the insurance industry as companies pull out of states entirely.
“While insurers are caught between a rock and a hard place when it comes to balancing profitability with customer experience, there are several ways they can blunt the negative effects of rising costs, such as proactively offering customers UBI alternatives, clearly signaling and explaining necessary rate increases and consistently delivering on brand promises to instill trust,” Garrett said.
Car insurance rates vary based on a variety of factors — from your credit score to driving habits. Use Credible’s free tools to shop around and lower your car insurance premium today.
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U.S. Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on “The Semiannual Monetary Policy Report to the Congress,” at Capitol Hill in Washington, U.S., Feb. 11, 2025.
Craig Hudson | Reuters
The popular narrative among Federal Reserve policymakers these days is that policy is “well-positioned” to adjust to any upside or downside risks ahead. However, it might be more accurate to say that policy is stuck in position.
With an abundance of unknowns swirling through the economy and the halls of Washington, the only gear the central bank really can be in these days is neutral as it begins what could be a long wait for certainty on what’s actually ahead.
“In recent weeks, we’ve heard not only enthusiasm — particularly from banks, about possible shifts in tax and regulatory policies — but also widespread apprehension about future trade and immigration policy,” Atlanta Fed President Raphael Bostic said in a blog post. “These crosscurrents inject still more complexity into policymaking.”
Bostic’s comments came during an active week for what is known on Wall Street as “Fedspeak,” or the chatter that happens between policy meetings from Chair Jerome Powell, central bank governors and regional presidents.
Officials who have spoken frequently described policy as “well-positioned” — the language is now a staple of post-meeting statements. But increasingly, they are expressing caution about the volatility coming from President Donald Trump’s aggressive trade and economic agenda, as well as other factors that could influence policy.
“Uncertainty” is an increasingly common theme. In fact, Bostic titled his Thursday blog post “Uncertainty Calls for Caution, Humility in Policymaking.” A day earlier, the rate-setting Federal Open Market Committee released minutes from the Jan. 28-29 meeting, with a dozen references to the uncertain climate in the document.
The minutes specifically cited “elevated uncertainty regarding the scope, timing, and potential economic effects of possible changes to trade, immigration, fiscal, and regulatory policies.”
Uncertainty factors into the Fed’s decision making in two ways: the impact that it has on the employment picture, which has been relatively stable, and inflation, which has been easing but could rise again as consumers and business leaders get spooked about the impact tariffs could have on prices.
Missing the target
The Fed targets inflation at 2%, a goal that has remained elusive for going on four years.
“Right now, I see the risks of inflation staying above target as skewed to the upside,” St. Louis Fed President Alberto Musalem told reporters Thursday. “My baseline scenario is one where inflation continues to converge towards 2%, providing monetary policy remains modestly restrictive, and that will take time. I think there is a potential for inflation to remain high and activity to slow. … That’s an alternative scenario, not a baseline scenario, but I’m attentive to it.”
The operative in Musalem’s comment is that policy holds at “modestly restrictive,” which is where he considers the current level of the fed funds rate between 4.25%-4.5%. Bostic was a little less explicit on feeling the need to keep rates on hold, but emphasized that “this is no time for complacency” and noted that “additional threats to price stability may emerge.”
Chicago Federal Reserve President Austan Goolsbee, thought to be among the least hawkish FOMC members when it comes to inflation, was more measured in his assessment of tariffs and did not offer commentary in separate appearances, including one on CNBC, on where he thinks rates should go.
“If you’re just thinking about tariffs, it depends how many countries are they going to apply to, and how big are they going to be, and the more it looks like a Covid-sized shock, the more nervous you should be,” Goolsbee said.
Many risks ahead
More broadly, though, the January minutes indicated a Fed highly attuned to potential shocks and not interested in testing the waters with any further interest rate moves. The meeting summary pointedly noted that committee members want “further progress on inflation before making additional adjustments to the target range for the federal funds rate.”
There’s also more than just tariffs and inflation to worry about.
The minutes characterized the risks to financial stability as “notable,” specifically in the area of leverage and the level of long-duration debt that banks are holding.
Prominent economist Mark Zandi — not normally an alarmist — said in a panel discussion presented by the Peter G. Peterson Foundation that he worries about dangers to the $46.2 trillion U.S. bond market.
“In my view, the biggest risk is that we see a major sell off in the bond market,” said Zandi, the chief economist at Moody’s Analytics. “The bond market feels incredibly fragile to me. The plumbing is broken. The primary dealers aren’t keeping up with the amount of debt outstanding.”
“There’s just so many things coming together that I think there’s a very significant threat that at some point over the next 12 months, we see a major sell-off in the bond market,” he added.
In this climate, he said, there’s scant chance for the Fed to cut rates — though markets are pricing in the potential for a half percentage point in reductions by the end of the year.
That’s wishful thinking considering tariffs and other intangibles hanging over the Fed’s head, Zandi said.
“I just don’t see the Fed cutting interest rates here until you get a better feel about inflation coming back to target,” he said. “The economy came into 2025 in a pretty good spot. Feels like it’s performing well. Should be able to weather a lot of storms. But it feels like there’s a lot of storms coming.”
Walmart stock may be a steal.
Former Walmart U.S. CEO Bill Simon contends the retailer’s stock sell-off tied to a slowing profit growth forecast and tariff fears is creating a major opportunity for investors.
“I absolutely thought their guidance was pretty strong given the fact that… nobody knows what’s going to happen with tariffs,” he told CNBC’s “Fast Money” on Thursday, the day Walmart reported fiscal fourth-quarter results.
But even if U.S. tariffs against Canada and Mexico move forward, Simon predicts “nothing” should happen to Walmart.
“Ultimately, the consumer decides whether there’s a tariff or not,” said Simon. “There’s a tariff on avocados from Mexico. Do you have guacamole with your chips or do you have salsa and queso where there is no tariff?”
Plus, Simon, who’s now on the Darden Restaurants board and is the chairman at Hanesbrands, sees Walmart as a nimble retailer.
“The big guys, Walmart, Costco, Target, Amazon… have the supply and the sourcing capability to mitigate tariffs by redirecting the product – bringing it in from different places [and] developing their own private labels,” said Simon. “Those guys will figure out tariffs.”
Walmart shares just saw their worst weekly performance since May 2022 — tumbling almost 9%. The stock price fell more than 6% on its earnings day alone. It was the stock’s worst daily performance since November 2023.
Simon thinks the sell-off is bizarre.
“I thought if you hit your numbers and did well and beat your earnings, things would usually go well for you in the market. But little do we know. You got to have some magic dust,” he said. “I don’t know how you could have done much better for the quarter.”
It’s a departure from his stance last May on “Fast Money” when he warned affluent consumers were creating a “bubble” at Walmart. It came with Walmart shares hitting record highs. He noted historical trends pointed to an eventual shift back to service from convenience and price.
But now Simon thinks the economic and geopolitical backdrop is so unprecedented, higher-income consumers may shop at Walmart permanently.
“If you liked that story yesterday before the earnings release, you should love it today because it’s… cheaper,” said Simon.
Walmart stock is now down 10% from its all-time high hit on Feb. 14. However, it’s still up about 64% over the past 52 weeks.
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