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Home-insurance payouts are shrinking. Here’s how to prevent the worst.

Thanks to inflation and climate change, homeowners are getting less money back from their insurers to repair and rebuild.

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Updated May 26, 2024 at 10:10 a.m. EDT|Published May 23, 2024 at 7:00 a.m. EDT
Local residents walk among the debris from tornado damaged homes, May 22, 2024, in Greenfield, Iowa. (Charlie Neibergall/AP)
6 min

With tornado season in full swing — hitting Texas and Iowa hard in the last week — and hurricane and wildfire season looming this summer, insurance experts say millions of homeowners will find their policies failing to cover repairs and rebuilding just when they’re urgently needed.

A 2023 study published in the Connecticut Insurance Law Journal found 77 percent of insurance payouts in California in 2018 and 2019 didn’t fully cover replacement costs, with the average payout falling 35 percent short. Following natural disasters like wildfires, 96 percent of insurance payouts were insufficient.