A last-resort insurance policy with fewer homeowner protections and less government oversight is booming, a Washington Post analysis finds, as traditional insurers continue to back away from areas of the country most vulnerable to extreme weather.
The policies are growing fastest in California, Florida, Texas and South Carolina because increasingly intensifying weather and massive disasters are putting more insurers on the hook for substantial claim payouts. Last year in California, insurance companies paid out $23 billion in homeowners claims, according to industry data.
The amount of premiums written under what is known as “surplus” or “excess” insurance lines has nearly tripled nationwide in the past five years, from about $1.5 billion in 2021 to $4.1 billion in 2025, according to data from the National Association of Insurance Commissioners (NAIC) — which insurers submit to the organization — and analyzed by the independent firm Weiss Ratings and provided to The Post. The Post reviewed the data and the Weiss analysis.
While this represents only a small share of the total $187 billion in premiums written in the United States each year, according to the Weiss data, industry experts say they reflect a problem where Americans living in the most weather-exposed places are becoming harder to insure.
In 2025, the Treasury Department’s Federal Insurance Office released a
report showing how, due to climate-related events, millions of Americans were finding it harder to obtain insurance and had to pay more for it.
And as more
insurers pull back or limit coverage, more Americans have struggled to find it and have sought out surplus line plans. Independent brokers often steer homeowners to surplus policies when they cannot obtain a traditional plan, though carriers also advertise directly to consumers.
These once-niche policies, which date to the late 1800s, historically covered commercial, high-risk or unusual properties.
They can sometimes be more expensive and often have more limitations and restrictive clauses, including arbitration clauses stating that homeowners cannot select their own contractors or price adjusters.
Experts said they have fewer consumer protections, prompting some advocates and state regulators to warn that homeowners may get lower payouts in the event of a disaster.
California’s surplus line industry is expanding more than almost any other state, according to The Post and Weiss analysis of NAIC data, which only includes insurers based in the U.S. Since 2021, the amount of surplus premiums written in California increased tenfold from $135 million to nearly $1.3 billion, now accounting for 7 percent of all homeowners premiums in the state compared with just 1 percent five years ago.
berkeleyearth.org
