How many homeowners are uninsured?
A recent study reveals that more than six million homeowners in the United States lack home insurance coverage.
This group of uninsured homeowners includes a significant portion of Native American, Hispanic, and Black homeowners.
This glaring absence of coverage leaves them highly vulnerable to natural disasters and significant property damage.
USA Today highlighted the report. The study indicates that uninsured properties make up 7.4% of all properties nationwide. This amounts to an estimated $1.6 trillion in unprotected property value.
The report also underscores the broader ramifications, particularly the exacerbation of racial inequality. It suggests that disparities in insurance access could deepen the racial wealth gap over time.
Such a wealth gap hinders the ability of certain demographic groups to fully benefit from homeownership and wealth accumulation.
Why do six million Americans lack home insurance coverage?
The US Census Bureau conducted a survey among homeowners in 2021.
Analysis of data from the 2021 American Housing Survey sheds light on the reasons behind the lack of home insurance coverage among millions of Americans.
The study reveals that homeowners with annual incomes under $50,000 are twice as likely to be uninsured compared to the general population.
Moreover, significant disparities persist across demographic lines. For example, 22% of Native American homeowners, 14% of Hispanic homeowners, and 11% of Black homeowners lack coverage.
Additionally, properties such as manufactured homes and inherited residences are disproportionately uninsured. Geographic factors also play a role.
Rural homeowners and those residing in specific metropolitan areas, such as Houston and Miami, as well as states like Mississippi, New Mexico, and Louisiana, face higher rates of uninsurance.
Sharon Cornelissen, housing director at the Consumer Federation of America and co-author of the report, emphasizes the financial vulnerability faced by individuals who cannot afford homeowners insurance.
It places those people with no home insurance coverage at risk of devastating losses.
What measures can be taken to improve the situation?
The report also suggests several measures to address the enormous lack of home insurance coverage.
The recommendations include urging state insurance regulators to gather more comprehensive data on insurance gaps and disparities.
The report also advocates for investments in community risk reduction and home fortification. Furthermore, it calls for investigations into the incidence of insurance “redlining.”
It therefore proposes more extensive research and application of Fair Housing laws to rectify disparities.
Douglas Heller, director of insurance at the Consumer Federation of America, underscores the broader implications of the study’s findings.
He warns that when millions of families lack access to or cannot afford insurance coverage for their homes, it leaves entire communities exposed.
He urges lawmakers, insurance regulators, and emergency management agencies to heed the findings as a crucial call to action.