Recap: Senate Hearing Focuses on Insurance Costs, Availability
May 6, 2025
The Senate Banking Committee held a May 1 hearing titled Examining Insurance Markets and the Role of Mitigation Policies with the following witnesses:
- Robert Gordon, Senior Vice President, Policy, Research & International, American Property Casualty Insurance Association (APCIA);
- Alex Epstein, President and Founder, Center for Industrial Progress;
- Michael Newman, General Counsel, Insurance Institute for Business and Home Safety (IBHS); and
- Jessica Pyska, Supervisor, County of Lake, California
During the hearing, senators and witnesses cited several underlying drivers of the higher cost and lower availability of property insurance, including:
- Demographic shifts to areas with higher climate risk,
- Inflation, particularly related to building materials;
- Legal system abuse, and
- Regulatory limitations.
They also raised concerns about discriminatory practices, market competition, and how federal policy shifts, including tariffs, affect cost volatility across states.
Disaster mitigation, infrastructure resilience, and forest management featured prominently as strategies to lower long-term insurance costs.
- Committee members and witnesses engaged in detailed discussions about property resilience efforts. Ms. Pyska affirmed the importance of hardening homes and discussed Lake County's attempts to "cluster harden" entire communities with wraparound fire breaks to ensure the entire community is resilient.
- Sen. Warner (D-VA) noted the U.S. Chamber of Commerce suggested that every $1 invested in resilience and disaster preparation reduces a community's economic costs by $7.
- However, it is not clear whether resilience efforts have thus far resulted in lower insurance costs for property owners.
Multiple members criticized cuts to federal programs like Building Resilient Infrastructure and Communities Grants (BRIC) and other grants provided by the Federal Emergency Management Agency (FEMA).
- Sen. Andy Kim (D-NJ) raised concerns about efforts to privatize or eliminate the National Flood Insurance Program (NFIP), questioning whether the private sector is equipped to absorb these costs while keeping insurance premiums low.
- APCIA’s Gordon explained that the NFIP, which covers 4.7 million households, charges significantly less than the private market. He also stressed the important role NFIP plays in encouraging community floodplain management and developing flood maps, and building codes.
- To listen to a podcast in which CREFC’s Sairah Burki and David McCarthy share their thoughts about the NFIP with The Commercial Property Executive’s Therese Fitzgerald, please click here.
CREFC’s Property & Resilience Committee has closely covered CRE insurance issues over the past few years via presentations from experts, webinars, and panels at conferences. Please see
here for more information and stay tuned for forthcoming webinars.
Contact
Sairah Burki (
sburki@crefc.org) with any questions.