The American Property Casualty Insurance Association is recommending steps the industry can take to improve insurance affordability and availability for American consumers.
The rising cost of living and homeownership is creating challenges for American families, the association said, and that increases the financial pressures facing households across the country. The APCIA said the industry needs to work to help reduce the risk of loss and improve affordability and availability of insurance coverage while staying in a financially strong position for policyholders.
“Insurance costs have risen in recent years due to inflation, more frequent and severe natural disasters, more people living and building in high-risk areas, and legal system abuse,” said David A. Sampson, president and CEO of APCIA. “While we are seeing signs of improvement, insurers recognize that rising costs are straining household budgets. Insurers are working across the housing industry, and with leaders at all levels of government, on ways to ease cost pressures, particularly by reducing losses through mitigation and resiliency efforts and by addressing legal system abuse.”
The property and casualty industry is experiencing huge financial losses over the past few years, the association said, especially in the homeowners and auto lines. The losses have placed significant strain on insurers’ financial results, the association said. U.S. insurers incurred a record $522 billion in losses due to natural catastrophes over the past five years – the highest five-year total on record. To maintain a strong capital position to pay claims, companies should adjust pricing as needed to restore financial strength and close the gap between premiums and losses and expenses.
The association said the industry is seeing the early signs of stabilization in some lines. Net premium rates slowed in 2025 which means policyholders are benefiting from fewer and smaller rate increases. Rate reductions have been most pronounced in states with improved loss experience, led by Florida where legislation reforms targeting legal system abuse have improved market conditions and encouraged carriers to return. The result has been approved rate decreases for many drivers and homeowners. Property reinsurance rates declined in 2025 and 2026 after insurers and reinsurers made record payments for wildfire and severe convective storms. The lack of hurricanes making landfall in the U.S. Lowered hurricane losses strengthened primary and reinsurance capital and will further reduce cost pressures on policyholders. Industry surplus increased in 2025, providing additional stability to absorb losses in 2026.
But challenges remain, the association said as the cost of homeowners insurance continues to experience pressure from high reconstruction costs and more severe weather events.
Strengthening the Insurance Marketplace requires updating and modernizing regulations, encouraging stronger building practices and improving transparency for homebuyers, the association said.