Utah leads the nation in dropped homeowners insurance policies. Here's why

PARK CITY — Utah homeowners are losing their insurance coverage to nonrenewals at a higher rate than homeowners in any other state, according to data from the National Association of Insurance Commissioners.

Insurance companies refused to renew 4.45% of Utah homeowners' policies. That's roughly one in every 22 policies, well above California's second-highest rate of 2.93%.

You might expect wildfire-ravaged California or hurricane-prone Florida to top this list. Nope. Utah.

"There's just been a lot of changes," Utah Insurance Commissioner Jon Pike told Get Gephardt, describing the situation as "kinda a perfect storm in Utah."

He says in Utah, and all over the West, insurance companies are responding to reality: Drought has led to more, stronger fires. Inflation makes rebuilding more expensive. And folks are building more in what's officially called the "wildland urban interface," where homes meet undeveloped land.

Insurance companies are taking stock.

"They're conservative organizations. You know, they've got risk to deal with," Pike said.

But there is also some important nuance to Utah topping the insurance-dropped list, and it has nothing to do with natural disasters, Pike says.

Several insurance companies, for one reason or another, just decided they were done. They didn't drop one person for a specific reason. They dropped everyone.

"Three large companies that just said, we're getting out of this piece of the business," Pike said.

Pike says that without those unusual business withdrawals, Utah's numbers look much closer to normal.

Normal, but not necessarily easier for the families who got the axe.

Pike acknowledged that's a lot of people, but said he is not aware of anyone who has been unable to get replacement insurance.

"So there's options, but are they affordable?" Get Gephardt asked.

"And that's the question, right?" Pike responded.

The Utah Department of Insurance says it's monitoring the trends.

Despite the attention-grabbing headline that a lot of Utahns are being dropped by insurance, department officials say they feel the market is actually beginning to stabilize a bit.