The anti-redlining movement took shape in the 1970s as a response to long-standing obstacles that made it difficult for all communities to prosper. Financial companies engaged in redlining by mapping out neighborhoods they refused to serve. Loans to people of color were denied at higher rates, or originated at higher costs, to the borrower. Blind spots in consumer data made it difficult to detect differences in how customers were treated. Activists and organizations worked with allies in Congress to pass the Community Reinvestment Act (CRA) and the Home Mortgage Disclosure Act (HMDA) to address these barriers.
The CRA requires regulators to evaluate all banks on how well they serve the credit needs of the communities they operate in. The HMDA requires that mortgage lenders disclose how they respond to loan applications on an annual basis. These landmark laws ensure fairness in our financial system by requiring lenders to demonstrate that their business operations foster equitable access to property ownership and the wealth it creates. However, neither the CRA nor the HMDA cover a prerequisite of any mortgage application – the ability to secure affordable property insurance.
Similar to mortgage lending, discrimination in property insurance is well documented. In 1979, civil rights advisory committees in several Midwestern states identified that insurance rates and marketing practices were “frequently arbitrary and unfairly discriminatory” and that “insurance unavailability threatens the viability of entire communities,” with communities of color disproportionately burdened.
National People’s Action confirmed that insurance companies engaged in redlining practices when they published maps that the Kemper Corporation submitted to Illinois state regulators that pinpointed “restricted areas” in Chicago where Kemper would not originate insurance policies. More recently, the National Fair Housing Alliance found that Travelers Insurance denied coverage to rental properties if tenants received public housing assistance, a practice that discourages landlords from making rental housing available to all.
The cost of property insurance is also rising. From 2021 to 2024, insurance premiums became more expensive in 95% of zip codes – with a third of zip codes reporting insurance costs increasing by more than 30%. Insurance companies are also dropping paying policyholders more frequently.
Since lenders require insurance, the increasing unavailability of affordable insurance could result in “regions of the country where you can’t get a mortgage,” as Federal Reserve Chairman Powell testified to Congress last year. However, homeowners and buyers aren’t the only ones affected as the cost of insuring rental properties has skyrocketed to a 75% increase from 2019 to 2024. A recent study conducted by the State of New York found that affordable housing developers had “seen premiums rise, even in instances where there had been no previous claims made, to levels that they deemed prohibitively expensive.”
A major reason why insurance costs are accelerating is due to the increased frequency of destructive weather events. In 2024, there were 27 extreme weather events that each caused at least $1 billion in damages in the US, as well as over 550 deaths. During the 2022-2024 period, the US averaged 23 of these events per year – almost double the average number of these events in the 2010s – and over triple the average in the 2000s. Insured natural catastrophe losses in the US are at record levels, reaching $117 billion in 2024 and accounting for over three quarters of global insurance losses caused by extreme weather events.
Insurance companies respond to these losses by raising premiums and refusing to renew or write new policies to reduce their financial exposure. Without insurance, homebuyers risk defaulting on loans and being unable to repair damage to their most valuable asset. One insurance executive has warned this could result in the “economic value of entire regions – coastal, arid, wildfire-prone – vanish[ing] from financial ledgers” and that “markets will reprice, rapidly and brutally”.
Insurance companies themselves, particularly US insurance companies, are also contributing to climate change by continuing to invest in fossil fuel companies and projects. This creates a vicious cycle where insurance companies invest their customers’ premium payments into fossil fuel endeavors in order to have funds to settle claims. Those same investments then increase the likelihood of damages and insurance claims, with insurance companies subsequently raising premiums or withdrawing from communities altogether to minimize losses and maximize profits.
If left unchecked, this cycle will push homeownership further out of reach and leave fewer opportunities for affordable rental housing. It’s also important to note that insurance companies are doing quite well as they raise rates and drop policies. Despite claims from insurance companies that the industry is struggling and must raise premiums as a result, the industry reported record profits in 2024 – nearly doubling their profits from 2023 and quadrupling earnings reported in 2022. 2025 is expected to be another banner year for the industry as well.
Luckily, the anti-redlining movement provides a blueprint for deconstructing access to wealth barriers created by rising insurance costs and unavailability. Extending the CRA to insurance companies would give regulators more tools to promote affordable insurance through the development of a public rating system for insurance companies and penalties for substandard performance. Regulators would be able to review the community impact of an insurance company’s investments, such as their participation in green bonds and their level of financing that helps underserved communities prevent and minimize damages after extreme weather events.
Extending CRA to insurance companies would give consumers an opportunity to weigh in on the business practices of insurance companies, such as providing their experiences with the processing of claims or quality of coverage information. Furthermore, this will also make the CRA more effective at evaluating how financial institutions meet credit needs. Keeping insurance out of the CRA review process puts banks currently covered by CRA at a disadvantage as opportunities for lending and community development financing shrink due to insurance gaps and rising costs.
Regulators should also start annually collecting and disclosing more data on property insurance rates similar to what mortgage lenders have had to follow since 1975 thanks to HMDA. This should include reporting on premiums, deductibles, non-renewals and claim denials broken down by the race, ethnicity, gender and income of policyholders and the location of the insured property. Mortgage disclosures have been an essential tool for enforcing anti-discrimination laws and holding lenders accountable.
Just like mortgage data, publicly available insurance information will give advocates the ability to back up lived experiences with hard facts that show how specific groups and neighborhoods are being treated differently. Policymakers should ignore claims that this isn’t feasible or will raise costs. Most of this information can be gathered by having customers and insurance companies complete simple forms. Implementation costs for insurance companies would be minimal compared to their revenue and are likely to decrease over time as software companies compete to offer compliance solutions.
NCRC has been working with our members and partners to put these policies in place. The McCarran-Ferguson Act of 1945 actually gives states the ability to license and regulate insurance companies in place of the federal government. New York State has already introduced the Insure Our Communities Act (IOC) that would extend their state’s CRA law to cover property insurance companies and require data disclosures.
IOC would also require insurance companies in New York State to stop financing new fossil fuel projects and phase out existing fossil fuel investments within five years. These steps are needed because increases in affordability created through CRA and data disclosures will be short-lived unless we take action to reverse the root cause of the current insurance crisis – unsustainable climate change. NCRC is also a member of the Equitable & Just Insurance Initiative, whom we worked with to develop model data disclosure language that can be used in your state.
The anti-redlining movement was able to achieve critical policy changes that continue to give advocates and regulators the ability to hold banks accountable for how they serve communities. We must now do the same for insurance companies. Or, to quote the “mother of CRA” Gale Cincotta when she spoke at the Insurance Redlining & Reinvestment Conference in Chicago in March of 1979:
“Adequate and affordable and available insurance is a right. It is not a privilege which depends upon your address, age of your dwelling, or your race… Insurance is a right we must now include when we speak of civil rights.”
Kevin Hill is the Senior Policy Advisor with NCRC’s Policy and Government Affairs team.
Photo credit: Vlad Deep via Pexels.
