Insurance Premiums and Climate Withdrawals — 2026-09-20
Nine insurers are exiting the ACA marketplace for 2027 as premiums climb, while State Farm resumes writing new home policies in California under strict wildfire standards. Meanwhile, Connecticut officials declared the health insurance system "broken" after approving significant rate hikes, and new laws in California address smoke damage claims.
Insurance Premiums and Climate Withdrawals — 2026-09-20
Top developments
Nine Insurers Exit ACA Marketplace for 2027
Nine insurers have formally notified regulators of their decision to leave the Affordable Care Act (ACA) marketplace for the 2027 coverage year. This withdrawal occurs amidst rising premiums, signaling a contraction in available options for consumers relying on federal exchanges. The exits are driven by insurer losses and a shifting risk pool, which has led to higher proposed rates across the board.
State Farm Resumes New Home Policies in California Under Strict Conditions
For the first time since 2023, State Farm will begin writing new home insurance policies in California, but only for properties that meet rigorous wildfire safety standards. This partial return to the market highlights the tension between climate risk and insurance availability. The move comes as California homeowners continue to struggle with coverage gaps in high-risk zones.
Connecticut Declares Health Insurance System "Broken" Amid Rate Hikes
Connecticut state officials, including Comptroller Sean Scanlon, described the state's health insurance system as "broken" following the finalization of new rates for 2027. The approved increases are characterized as unsustainable by local leaders, who argue that structural failures have led to excessive cost burdens on residents. The rate approvals reflect broader national trends of rising healthcare costs outpacing wage growth.
California Passes New Laws on Wildfire Smoke Damage Claims
California Governor Gavin Newsom signed four new laws addressing insurance claims related to wildfire smoke damage, a significant issue following the January 2025 fires where over 13,000 homeowners filed claims for non-fire damage. These laws aim to clarify insurer obligations regarding smoke inhalation and structural damage from smoke, potentially reducing disputes between carriers and policyholders. The legislation represents a major shift in how climate-related losses are adjudicated in the state.
Home Insurance Costs Rise for Fifth Consecutive Year
Homeowners are facing their fifth straight year of premium increases, with the steepest jumps in 2026 occurring in Louisiana, Michigan, Virginia, Kentucky, and Minnesota. The average cost of homeowners insurance continues to climb, driven by inflation, repair costs, and increased frequency of severe weather events. This trend underscores the growing financial pressure on households in both traditional and climate-vulnerable regions.
Local view
Politico reports that industry titans are warning Congress that current patient protection laws are inadvertently driving up health insurance premiums. The companies argue that regulatory constraints are pushing costs higher, creating a feedback loop that harms consumers. This narrative is being used to lobby for changes in federal healthcare regulation.
The San Francisco Chronicle highlights the local impact of California's new smoke damage laws, noting that many homeowners were previously denied claims because their homes did not burn. The new legal framework provides clearer guidelines for insurers, potentially alleviating some of the stress on policyholders in wildfire-prone areas.
Context & numbers
- ACA Premium Increases: Insurers are raising premiums by an estimated 26% for the upcoming year, though most enrollees may see sharper increases in out-of-pocket costs due to tax credit expirations.
- Car Insurance Averages: The average annual car insurance premium in the U.S. is now $2,256, a 3% increase over the previous year.
- Home Insurance Trends: Home insurance rates have climbed for five consecutive years, with some states seeing increases above 20%.
On the radar
- State Farm's Partial Return: Monitor how many California homeowners qualify for State Farm's new policies under the strict wildfire safety standards. This could serve as a model for other insurers considering re-entry into high-risk markets.
- Congressional Hearings: Follow developments from the POLITICO report on industry warnings to Congress regarding patient protection laws and premium hikes. Legislative responses could significantly impact future ACA marketplace stability.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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