Finance

Millions of homeowners don’t have homeowners insurance due to high costs

Published

1 year ago

April 17, 2024

Business Finance News

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.

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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.

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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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Finance

Chinese factories halt, restart work to mitigate U.S. tariff disruption

Published

2 hours ago

May 2, 2025

Business Finance News

YIWU, CHINA – NOVEMBER 26: Foreign clients select festive goods at China Yiwu International Trade City on November 26, 2024 in Yiwu, Zhejiang Province of China.

Hu Xiao/VCG via Getty Images

For years, Christmas merchandise has been hitting the U.S. shelves earlier, as retailers try to capitalize on the lucrative holiday season — a retail phenomenon known as “Christmas creep.”

However, tariffs could be the Grinch that disrupts year-end festivities, as Chinese factories and their U.S. buyers navigate tariff uncertainties to ensure that shelves stateside will be well-stocked in time for Christmas.

Shortly after U.S. President Donald Trump unveiled sweeping tariffs on April 2 — including a 34% tariff on imports from China that were later ramped up to 145% — many U.S. retailers’ reaction was to halt their orders from Chinese suppliers, forcing factories to pause production, according to CNBC interviews.

However, industry representatives say that some production has restarted in the last few days, as concerns about business disruptions and missed opportunities outweigh the tariff uncertainties.

“If you don’t start producing in the next couple of weeks, you’re going to start missing Black Friday and Christmas,” Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions, said in a phone interview Tuesday.

“Both sides are trying to be flexible to some degree,” he said. “Retailers are starting to realize if these supply chains stop, it will be much more difficult to get them up and running [again].”

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Johnson described how, for example, a pause in orders for a factory making spoons would impact the company that rolls the steel, as well as the iron ore smelter. “These supply chains themselves, the upstream, are also starting to close down. If they close down, even if we have some kind of a deal, it will take time for things to [restart].”

Despite some rerouting of China-made goods through other countries, replacing existing supply chains and shipping schedules will be difficult to achieve overnight. For 36% of U.S. imports from China, more than 70% can only be sourced from mainland suppliers, according to a Goldman Sachs analysis earlier in April.

For example, electronic products need to be shipped out of China by early September to hit U.S. shelves right after the Thanksgiving holiday at the end of November, taking into account customs clearance and the distribution chain, said Renaud Anjoran, CEO of Agilian Technology, an electronics manufacturer in China. The Guangdong-based company delivers half of its products to the U.S. market.

It takes around six months to manufacture, test, assemble, and package, meaning suppliers ideally should have started preparing for these orders in March, said Anjoran.

Shrinking shipments

Many U.S. buyers had started stockpiling inventories since late last year, anticipating higher tariffs after Trump returned to office. As frontloading continued, China’s exports to the U.S. rose by 9.1% in March from a year ago, according to CNBC’s calculation of official customs data, while imports from fell 9.5% on year. April trade figures are expected to be released on May 9.

But those frontloading efforts have started to dwindle. The number of cargo-carrying container ships departing from China to the U.S. has fallen sharply in recent weeks, according to Morgan Stanley’s tracking of high-frequency shipping indicators. Cancelled shipments have also skyrocketed by 14 times in the four weeks from April 14 to May 5, compared to the period from March 10 to April 7, the investment bank said.

In April, a gauge of new export orders from Chinese factories fell to the lowest level since late 2022, according to the national statistics bureau.

“Currently, we do not have a lot of purchase orders for the next few months from American customers,” Anjoran said. Most of his clients have stockpiled inventory that was shipped to the U.S. before Chinese New Year at the end of January, with some orders trickling in March and April.

Some U.S. buyers are waiting to see whether tariffs will be reduced to a more acceptable level in May before resuming shipments, Ryan Zhao, a director at Jiangsu Green Willow Textile, told CNBC. For now, the company has production on hold for orders from its U.S. clients.

Recent reports pointed to some tariff reliefs on the ground as both governments sought to blunt the economic impacts of punitive tariffs. China reportedly granted tariff exemptions to certain U.S. goods, including pharmaceuticals, aerospace equipment, semiconductors, and ethane imports.

In the latest relief, Trump signed an executive order exempting foreign car and parts imports from additional levies, following an earlier rollback of tariffs on a range of electronic products, including smartphones, computers and chips.

Trying to time it right

Despite concerns about profit margins, some businesses are hedging their bets by partially refilling orders from China rather than enduring the sight of empty store shelves, said Tidalwave Solutions’ Johnson.

“A few factories told me some U.S. importers have instructed them to resume production in an attempt to ‘time’ anticipated tariff relief,” Martin Crowley, vice president of product development at Seattle-based wholesale toy seller Toysmith, said in an email Tuesday. The company’s website urges customers to place orders by May 16, for shipping by July 31, “to lock in current, non-tariffed pricing.”

In the last few days, many factories in the manufacturing centers of Yiwu, Shantou, and Dongguan have received clearance from Walmart and Target to resume production, Crowley added. Walmart and Target did not immediately respond to a CNBC request for comment.

Some Agilian customers are also placing relatively smaller orders, betting that tariff rates will decrease by the time their products arrive at U.S. ports.

However, in the event of a breakthrough in U.S.-China trade negotiations — and a rush to backfill orders ensues — that could drive up factories’ production costs and shipping prices.

“It is possible to rush, arrange production faster if quantities are not large … but if all American customers rush at the same time, the factories are going to be overwhelmed and air shipments will be quite expensive,” said Anjoran.