Upon buying is a act of optimism. It is also stressful. Families buying a new home have so much to think about, making sure they are covering their down payments, moving in, getting kids set up in a new school if they have children. Homeowners are confident that their monthly Insurance Premiums will provide a backstop against the physical and natural other dangers or incidents or accidents noting their coverage can help homeowners speak better at night. Or that is how it is supposed to work. Owners have faced a surprise when it is time to renew. Homeowners have spent time years making their payments without fail are shocked to find their insurance or too many cases will not renew their policies at all. Entire markets leaving consumers with few options that cost more. Consumers are counting on their insurance now more than ever. Since the beginning of the year to country has experienced 15 weather disasters, each resulting lay losses of more than 1 million. 15 million 15 weather disasters costume more than 1 million. Severe storms resulted in 34 dollars of insured losses of the first half of this year alone, the highest ever in a sixmonth period. Hawaii, florida, vermont, extreme weather events that uprooted americans lives. Losses from hurricane idahlia reached 20 billion. A letter detailing the loss vermont has suffered from devastating floods this summer. So often it is the lowest income residents we know that in disaster after disaster. It is the lowest income who have been pushed into the areas whose weather patterns continue to change. This is not just on the coast. Head of the association for property insurance says there is no place to hide from the severe natural disasters. The result has been a abrupt trend. Companies arent restricting coverage and raising rates or deductibles in some cases. As secretary yellen recently noted the protection gap increasing costs limiting options for families increasing Financial Stability concerns are cross financial system. U. S. Reinsurance rates, the cost of insurance that Insurance Companies buy to protect themselves from spreading out risks have reportedly increased 50 . These jumps in Insurance Premiums have been driven in part of severe or natural disasters for themselves. Higher reinsurance rates means higher insurance costs for Insurance Companies which means price hikes to consumers which will have millions of americans paying more for Home Insurance. While others scramble to find any insurance at all because the insurance is refusing to renew their apologist policy. Not to be outdone in florida since 2020, 16 severe storms and hurricanes have caused more than 100 billion dollars worth of damage and led to ax abyss of insurers. Farmers insurance became the fourth in florida to exit the market, joining bankers insurance, lexington insurance what an ounce in july would stop outright property insurance in that state. Days later, aaa announced that it will not renew high exposure policies in the state despite the fact that every yearly Homeowner Insurance premium costs 6,000, the highest in the country. 14 insurance countries reentered the receivership process. Insurers left homeowners and businesses left no choice to receive statemandated with typically higher rates. Insurers are the last resort appeared these insurers had a small share of policy, but climate exposures increased everywhere had been battered. In florida, floridas citizens, the states insurer last resort is now the states single largest property insurer feared californias insurer insurer. Reportedly offering coverage to hundred thousand policies at the end of last year. It is not only homeowners hit, sure can coverage the National Multifamily counsel report similar issues for multi family sectors, higher rates and deductibles, coverage limitations, private market insurance at all. Because the insurance contract is between the Property Owner and the insurer, apartment owners say they are seeing a clear trend. Renters will only bear the burden as higher insurance costs are passed on to them. Todays witnesses understand the challenges facing homeowners and Property Managers for seeing the problem of rising insurance costs across many states. I am pleased to have all three of you here today to explore these important topics. Welcome. Thank you all for joining us today with such a important conversation about the state up insurance and throughout the country. The Important Role that insurance plays and the ability for homeowners as we discussed today to transfer the risk to a Insurance Company. As you would imagine, coming from South Carolina thinking about my friends in florida, georgia, North Carolina, thinking about the devastation of buyers in maui, my players prayers and thoughts are certainly with those who folks who have lost family members who have seen their properties destroyed. So much attention is given to the challenges of the environment, climate. Too often what we see whether in maui or other states, the manmade disaster that jeopardizes insurances of those states. I think about the fact that in my lifetime as a adult, i spent 20 plus years in the Property Casualty insurance business. I do have a infinity for the terms that we use while in business. Mike, have you ever been in insurance . One of the things that we both talk about is of pml, probable maximum loss. Can a Insurance Companies calculate accurately or even in the range of reality within the possible maximum loss within the market. Whether the market is a charleston area or the state of california, ohio or other natural disasters. Can a company predict the loss that will be occurred based on the premiums they charged per policy. When you cannot, you do not stay in the market. It is kind of that simple. Insurance companies have to follow the basic rules of economics like any other business. That is one of the challenges that we see, particularly in states like california and florida. California overregulated market makes it difficult for Insurance Companies to make a profit in those states. When you cannot make a profit, you do not stay in the states. One of the reasons you see Insurance Companies that were just named leaving markets because the efficiency is impossible to get there. The inability to find a path forward to provide some reduction of that risk. Or as i discussed before, the necessity of us to get our arms around the catastrophic occurrences from coasttocoast. Whether it is a hurricane, earthquake, flood, tornadoes. We have not really rustled with wrestled with the actual damages done by catastrophic occurrences across the country. On the coast or frankly if youre in the south, whether it is louisiana, florida, South Carolina, we account for all half of the premiums. If a flood happens in new jersey , ohio, policyholders there never heard of a Flood Insurance policy. They are drawing money out of a account without even putting resources out of the account. We have some real challenges that we should appreciate that every Insurance Company is wrestling with today. You think of a state like california and florida, one state you have a burdensome marketplace that is impressive. It is not just Insurance Companies that are fleeing states. Every other business can find another way to go seems to be looking for another market. The challenge that we see in florida, Regulatory Environment is challenging. The natural disasters are challenging. With only 9 of the policies, homeowner policies in the country they represent about 79 of Homeowner Insurance lawsuits. Over the last decade, companies in florida paid out 51 billion. However, 71 of that goes to attorney fees. Something is broken in the market where it is not the homeowner that is receiving the resources, it is the lawyers because of the challenges in a broken state as it relates to the environment that is apparent obvious and clear. Whether it is california or florida, we need to understand the challenges that these Insurance Companies face and why they continue to pull out the market. I would love to hear from the experts today, solutions. For us to have a panoramic view of how to keep Insurance Companies viable in those markets because homeowners today are desperately looking for opportunities to afford the coverage. I think the average of the chairman suggested earlier the average premium for a house 1700 of our homeowners for the same policy in florida it is 6,000. That is the case. It is not simply the case of rates efficiency based on sufficiency based on the probable loss of a natural disaster, it has to do with the 51 billion dollars paid to attorneys that have to be factored into that new definition. Sen brown i will introduce todays witnesses. Federal Advisory Committee insurance and member of the automobile Advisory Board term member the coalition against insurance fraud. Michelle noris at the National Church residences, the nations largest provider of senior housing. She serves as chair and board director. The director of the finance insurance policy program institute. He served as a director of Insurance Research in multiple roles. Please begin. Good morning, mr. Chairman. I am doug heller. There are several forces creating the property insurance crisis that has arrived in parts of the country and brewing in others. I will highlight what consumers are dealing with, the underlined crisis of the crisis and thoughts on how government and insurers can Work Together to build safer homes in more resilient communities appeared in 2022 american spends 125 billion in insurance, rising 40 faster since 2017. We hear many paying upwards of 500 a month just for the basic Home Insurance. Not surprisingly, regions exposed to the climate risk have been hit hard in the market. This is a national problem. Some of the highest Home Insurance prices are paid by residents of the midwest facing tornado and hail risk. The pain is not equally distributed. The neighborhood most vulnerable are often too communities of color or low income amplifying the crisis for the. It is not just geography targeting these communities. In all but a few states, insurers penalized homeowners if they do not have a great credit store even credit score, even if they did not file a claim adding more pressure on the premiums. The Insurance Company deciding to walk away from long served communities in some states entirely. Everyone in the mortgage is required to maintain coverage because people want protection for their most valuable asset, this is a scary situation. What makes people so angry, the insurers for years, who presumed experts on the risks, they told him that the neighborhoods are fine and insurable. For companies to take the chips off the table without warning and walk away is unacceptable, especially after the industry as a stick calls for climate risk analysis for years as the industry resisted calls for climate risk analysis for years. Or when people cant make their payments they end up being forced placed into expense coverage by the Mortgage Company. We are hearing more and more, people cannot afford to on a home because they cant get insurance. The third problem is the hollowing out of the coverage that people can afford. Rather than working with policyholders to reduce the risk, insurers are selling policies with more exclusions and higher deductibles. Companies are reducing their own risk for sure. It just transfers it back to homeowners, renters and other consumers. Why is this happening . The reality of worsening disasters is undeniable. Tackling requires a collaborative effort to reduce the risk that extends from Climate Change and more well defended and resilient communities. Better data collection, more grants for individual homeowners and building owners to their homes. When Property Owners invest in loss mitigation, they should be promised access to coverage and released on their premiums. This discussion must include property development, equity as we try to adapt to climate risk. If we do not take on larger questions, Insurance Companies will be the ones left in charge of policies through their ratemaking. The exploding crisis in the unregulated reInsurance Market. Property Insurance Company used to hedge their bets. Prices are up 35 since january alone if insurers can get the reinsurance that they seek. We need a meaningful Public Partnership to address this massive failure. Just as we did with terrorism. In exchange for insurers offering one without gaping holes. In capping, insurers cap and. To conclude, by prioritizing their own exposure to Climate Change rather than reducing the actual risk of loss, insurers have left american insurers in a bind that called us to the hearing today. Demand holistic approach to demand and. Reduce the damage done by Climate Change, strengthen the community and use innovative partnerships to yield affordable and property coverage to americans as we confront Climate Change together. If we have questions, i would love to talk about senator scotts concerns about what is happening in florida. I would thank the committee for having me here and conclude their. Mr. Chairman and committee members, i would like to thank you for this opportunity to speak about the opportunities in the property Insurance Markets and how this is impacting the multifamily sector, especially Affordable Housing. For over 60 years, housing and health care to older adults. We currently provide affordable rental homes for more than 20,000 low income seniors in 23 states. My remarks largely today reflect those of a growing coalition of multifamily housing stakeholders. Concerned by the trends in the Insurance Industry and the impact they have on the Affordable Housing and the people who live in those homes, i am proud to be associated with several of those organizations as you currently mentioned including Affordable Housing for the future where i am serving as chair. The National Family housing council, where we are a member appeared in these groups along with many other hausa trading associations recently created a task force focusing to the entrance market challenges Insurance Market challenges. In a slit this lens, i would like to share we know about the it is with this lens, i would like to share we know about the housing supply inaffordability. Property insurance rates have increased for 22 consecutive quarters. In just past three years Housing Providers have reported premium increases ranging from 30 to 100 for affordable rental housing. The National Church residences, we have seen our property and Casualty Insurance costs go 400 increase in six years. We are also seeing reduced coverage. Minimum deductibles on the property level policies have increased from 10,000 to 25000 and up to 100,000, which is the option we had to take this year. In addition to the risk increased, these high deductibles can conflict with the financial requirements. To avoid defaulting on financing , Housing Providers have to take additional policies, create layered coverages, all of which add costs. Even owners with very large portfolios like ours have little Bargaining Power in todays industry. The pressure created by these increases in fact our residents. Increase insurance costs results in increased rents in market rate housing and Affordable Housing communities. Continued rising cost may lead to reduction in services to our residents and threats to longterm sustainability of our community. High insurance costs are also hindering solutions to. The Affordable Housing crisis rising insurance costs means lower income to support debt or equity returns. If you cannot borrow as much or attract less investment, it becomes more difficult to finance the construction and preservation of the current Affordable Housing communities. We are seeing the volatility of Insurance Market being driven by three key issues. The unprecedented frequency of National Disasters. The impact of inflation on the replacement value methodology. Finally, on the Insurance Market, capacity and policy limitations. Many insurers have fees to underwrite multifamily casualty policies nationwide or insert markets prompted National Disasters like the gulf coast state like florida and louisiana. My message