Millions of Americans are losing their homes in a record number of weather catastrophes, and insurance companies are raising premiums to record levels in many states while some are simply going out of business.

Insurers are bleeding cash from weather-related events like wildfires, tornadoes, hailstorms, heavy rain and flooding. The list goes on and on, and has been attributed to climate change. For 2023, US storm insurance claims hit a record $63 billion, according to a recent report.

To cover their losses, insurers are raising rates, restricting coverage or pulling out of some areas "because they're concerned about having to pay out so much as more of these weather-related catastrophes occur", Dave Jones, director of the Climate Risk Initiative at UC-Berkeley's Center for Law, Energy and the Environment, told China Daily.

Insurers are losing money on homeowners coverage in 18 states, more than a third of the country. That is an increase from 12 states five years ago and eight states in 2013, according to The New York Times.

"Home insurers in the US had their worst underwriting performance since 2011 last year," Mark Friedlander, director of corporate communications for the Insurance Information Institute, told China Daily. For every dollar they collected in home premiums last year, insurance companies paid an average of $1.11 in claims and expenses, he said.

Insurance rates jumped by double digits in 25 states last year, with the biggest increases in Texas, Arizona and Utah, according to S&P Global. In some places, like Florida, rates have risen over 40 percent in the past five years. Rates in Arizona have skyrocketed more than 62 percent over the past five years.

Cindy N., who declined to provide her last name, and her husband, who are from Massachusetts, bought a condo in Florida 10 years ago. They used it during the winter months and found they could rent it when not there.

It worked out so well for them, they said, that they purchased two more condos in the same building and leased them. But then came Hurricane Idalia in August 2023.

It caused extensive damage to the building, so extensive that she and her husband said they couldn't afford the 100 percent increase in their homeowners insurance for the condominiums, so they sold two of them at a great loss and may sell the first one they purchased.

"We made money renting, but not with these high insurance rates," she told China Daily. "It's not worth it, and we're safer in Massachusetts."

In 2023, there were a record 28 weather and climate disasters, according to The National Oceanic and Atmospheric Administration (NOAA), with a total cost of at least $92.9 billion. In comparison, the annual average for such events between 1980 and 2023 was 8.5.

More than 14.5 million homes in the United States were hit by natural disasters in 2021, causing an estimated $56.92 billion in property damage, according to a 2022 report by CoreLogic. That means about 1 in every 10 homes in the US was affected.

Insurers react to their losses by raising prices based on actuarial data, said Friedlander. "They do a very comprehensive analysis of risk modeling, and then they price the coverage based on actuarially sound data. And when insurers have such a poor underwriting result, that means that they were not collecting enough premiums last year. So what happens is that they will continue to drive higher premiums in most markets across the country this year," Friedlander said.

The rising frequency and severity of natural disasters made it increasingly important for homeowners to have proper insurance. However, increased premiums and recent economic factors have affected their insurance choices. Cancellation notices have left them rushing to find new coverage to protect their houses.

Twelve percent of US homeowners don't have house insurance, according to a study conducted by the Insurance Information Institute in the spring of 2023. That is more than double the pre-pandemic rate. In 2019, before the pandemic, it was only 5 percent, Friedlander said.

In the US, you can't buy a house without a mortgage — unless you are paying for the house entirely in cash — and you can't get a mortgage without insurance. That is a provision of a mortgage agreement.

If insurance isn't purchased, two things could happen. The mortgage loan could default, leading to the loss of the home. More commonly, force-placed insurance could be applied, where the mortgage company insures the home itself, Friedlander said.

Force-placed insurance is "typically a lesser-quality insurance policy. You might pay up to five times more, and it doesn't provide the same level of coverage. So you never want to be in that situation," he said.

State Farm, the largest homeowners insurance company in the US, will stop covering more than 72,000 homes and apartments in California this summer. The company said the decision is due to soaring costs, increasing wildfire risks and outdated regulations, The Orange County Register reported.

More than 90 percent of companies in the California insurance market are either not offering new property insurance or have significant restrictions, KQED public radio station in San Francisco reported.

Marsha G., who requested her last name not be used, is nearly 70 years old and has lived in the Riverside, California, area for about 20 years. It is one of the highest-risk areas in the state for wildfires, but she said her house has been spared the flames.

But now, she told China Daily, her insurance company is excluding damage from wildfires in her policy, and she has decided to move far from the wildfires, maybe to another state. "How can I stay here? Without insurance, no way," she said.

A recent report by the First Street Foundation, a nonprofit focused on climate risk research, says that nearly 4.4 million properties in the US are at risk of increased insurance rates and reduced coverage due to wildfires. Additionally, 23.9 million properties are at risk due to wind, and 12 million due to flooding.

Meanwhile, states started to regulate insurance markets, holding the power to approve or reject rate increases, determine coverage extent, and enforce consumer protections.

California is forcing insurance companies to offer discounts to homeowners who take steps to protect their homes from a wildfire, such as installing fire-resistant roofs.

Minnesota is requiring insurers to provide discounts if homeowners are building their homes with climate-resilient materials. Kentucky and Georgia recently passed similar legislation, according to the Times.

Louisiana and Washington have sped up the process for insurance companies to raise their premiums, with the objective of attracting more insurance companies, and increased competition would ultimately keep premiums lower for residents. Arkansas recently allowed insurers to impose higher deductibles on people whose homes are damaged by hail or wind.

Agencies contributed to this story.