Property insurance rates to get a look by legislature
Jordan Hansen
(Missoula Current) Advocates worried about rises in property insurance rates are hoping a new legislative study will help lawmakers find an answer to why they’re soaring.
In a letter to the interim Economic Affairs Committee, the Consumer Federation of America said nationally, property insurance costs rose 8.7% from 2018 to 2022. Data beyond that — including at the state-level — is difficult to find, which was part of the reason the legislature ordered a study.
The National Association of Insurance Commissioners kept the data public until 2022, the letter says, and hasn’t released certain localized data from the report.
“In requesting this study, the Legislature identified the critical information gap regarding Montana’s property insurance market,” the letter states.
Information that at “minimum” should be collected includes home insurance policies, with the letter expressing hope rental properties and condominium housing information would be collected, as well as insurance collected by low-income housing developers.
State Auditor and Insurance Commissioner James Brown called the study “timely and relevant” in comments to the interim committee on July 22. Property casualty insurers made profits of $169 billion in 2024, according to research by the American Association for Justice.
“Dealing with the exploding cost of insurance in Montana is one of my top priorities,” Brown said in a response to a question from Rep. Mark Noland, a Bigfork Republican.
Along with wildfires and climate impacts, taxes, skyrocketing property values and the rising cost of building materials all are contributing to higher insurance rates.
Brown directly tied the problem into property taxes, which have exploded during the last decade, a topic that vexed the 2025 Legislature.
“So as the value of the home goes up, not only do property taxes go up, but the cost of insuring the home correspondingly goes up,” Brown said.
Adding to the problem is that rebuilding costs are also going up. In Montana — and across the country — nonrenewal rates are also increasing, another problem, according to a zip code level map created by advocacy organization Public Citizen.
Nonrenewal rates are increased rates by companies which raise them based on both wildfire risk and a company’s desire not to insure certain properties. Those rates are usually high, sometimes prohibitively so.
Wildfires are also increasing in Montana, Brown said, yet another problem for insurers. The Legislature took some steps during the session to address the fire issue, including allowing insurance companies to offer incentives to property owners who make efforts to make their homes more defensible against wildfire.
Brown called that a “good step” and said there was ongoing work to educate the public on preemptive fire mitigation measures.
Some advocates are pushing for using less flammable building materials, as well as better design practices when creating blueprints. Location matters, as does building deeper into the wildland-urban interface areas.
“The developer first mentality has given us a more expensive Montana, but it also means that all your other underwriting goes up,” said Jayson O’Neill, a policy and political advocate who worked for former Montana Gov. Brian Schweitzer. “Insurers are applying higher risk values to communities and individual homeowners based on these things and these development patterns, but not reciprocating when we actually do the right thing and mitigate (fire risk).”
O’Neill, who lives in Helena, pointed to projects to reduce fire risk in the city’s south hills. It makes sense to him home insurance rates would be impacted to some degree by fire mitigation efforts in the area. But without data that organizations can use to determine trends, it’s hard to know exactly what insurance companies are doing, he said.
“Consumers aren’t knowing these risk factors, they’re only learning about them after a disaster happens,” O’Neill said. “Why isn’t your insurance company that you pay all this money to providing you with more information about what’s affecting your rate; risk areas that they’re concerned about, and again, empowering the consumer to make good choices about how they can ‘derisk.’”
The warming climate is amplifying wildfires according to NASA, which tracks fires via satellite. And climate change is impacting insurance, organizations giving public comment during the committee meeting stated.
“It’s increasing insurance risk and affecting costs, it’s essential that Montana prepare for the challenges ahead, and by doing a thorough and comprehensive study,” Michael DeLong, a lobbyist with the Consumer Federation of America told the committee. “You can ensure that Montana is prepared and figure out ways to reduce risk and lower insurance costs.”
Regardless, homes in areas that burn frequently can see higher insurance rates.
The statistics around wildfires paint a grim picture.
According to Headwaters Economics, a nonprofit research group, wildfires are the fastest growing cause of hazard-related damages in the U.S. Losses from wildfires have also doubled as a proportion of total disaster claims in the last 30 years. Nine out of 10 of the most destructive fires in American history have happened since 2017.
Disasters are generally getting more expensive, and according to federal data, the number of billion-dollar disasters has risen dramatically since the 1980. The National Center for Environmental Information — inflation adjusted — reported 28 disasters that cost more than $1 billion in 2023 and 27 in 2024. In 1985, the highest year for billion-dollar disasters between 1980 and 1998, there were seven.
Wildfire risk is increasing, with issues around insurance reaching extremes in California — between 2020 and 2022, companies in that state declined 2.8 million new policies.
Other states like Alabama have made moves to strengthen homes against storms. In Florida, the state government was forced to create an “insurance of last resort” for homes that are no longer covered by any private company.