Where Rate Approval Takes Longest, Private Insurance Shrinks
Summary
A GAO regression across 32 states found that every 60 extra days a regulator takes to approve a homeowners insurance rate change tracks a 0.5-percentage-point rise in the share of homeowners on state insurers of last resort. Colorado's median wait was the longest in the country from 2020-2024, at 331 days, followed by California at 305. California's own last-resort plan more than doubled over that stretch, from about 200,000 policies to 450,000, with 78% of the growth in its highest wildfire-risk zip codes -- even as the same GAO analysis found wind risk moves premiums nearly seven times as much as wildfire risk does.
The slowest regulators in the country
Colorado and California⧉ had the two longest median rate-approval times in the nation from 2020-2024 -- 331 and 305 days -- followed by Hawaii, Florida, and New Jersey. The gap traces partly to regulatory design: California is a "prior approval" state, requiring insurers to wait out a regulator's review before charging a new rate, while Illinois is a "use-and-file" state, letting insurers charge while the filing is still under review. Of three filings reviewed in each state, Illinois regulators raised 2 objections total; California's raised 55⧉. A 2020 California Department of Insurance hearing found certain types of requests added about 111% to the average approval time.
View data as table
| Severe/extreme wind risk | +58% | +$1,294/year vs. major wind risk |
|---|---|---|
| Severe/extreme wildfire risk | +8% | +$181/year vs. major wildfire risk |
| State disaster costs +$10B | +8% | +$170/year, separate statewide regression |
Slower approval, less private coverage
measured insurance "availability" through the market share of FAIR and beach plans -- state-run coverage of last resort⧉ for homeowners private insurers won't touch. Nationally, that share rose from about 1.4% of the market in 2019 to about 2.5% in 2023. Florida and Louisiana's FAIR plans⧉ had the highest state market share in 2023, and North Carolina's beach plan led among beach plans -- all signs of shrinking private coverage. The same 32-state regression that flagged the 60-day/0.5-point approval link also found a $10 billion rise in a state's disaster costs tracked a 0.6-point rise in last-resort market share -- a similarly sized effect from a very different cause.
View data as table
| 2020 | ~200,000 policies | |
|---|---|---|
| 2024 | ~450,000 policies | +125%; 78% of growth in the highest wildfire-risk zip codes |
Why insurers hesitate
The caution has a financial basis: homeowners insurance claims and expenses exceeded premium income⧉ in 22 of the 30 years from 1995 through 2024, averaging a 4.2% underwriting loss across the line. Insurers respond to that cycle by pulling back in bad years and expanding in good ones -- and a slow-to-approve regulator narrows the room they have to reprice risk before pulling back entirely. is careful that its regressions show association, not proof of cause: approval times, disaster costs, and physical risk levels move together with premiums and with last-resort market share, but the agency didn't attempt to isolate one as the driver of the others.
The takeaway
- Colorado's regulators take the longest in the country to approve a homeowners insurance rate change -- a median of 331 days from 2020-2024, ahead of California's 305.
- ties longer approval waits to less private coverage. Every additional 60 days of wait tracked a 0.5-percentage-point rise in a state's insurer-of-last-resort market share, in a 32-state regression.
- California's FAIR Plan more than doubled in four years -- about 200,000 policies in 2020 to 450,000 in 2024 -- with 78% of that growth concentrated in the state's highest wildfire-risk zip codes.
- Wind risk moves premiums far more than wildfire risk does in 's national model: a 58% premium jump for severe wind risk versus 8% for severe wildfire risk, a gap the agency's data doesn't fully explain.
explicitly states its regressions show statistical association, not causation -- longer approval times, larger disaster costs, and higher physical risk levels all move together with premiums and with insurer-of-last-resort market share, and the agency did not attempt to isolate a single cause. The Illinois-vs-California objections comparison (2 vs. 55) is a three-filing illustrative sample cites as an example, not a statistically representative state comparison. 's report gives exact median approval-time figures only for Colorado and California among the five slowest states; Hawaii, Florida, and New Jersey are named as following them but without published day counts in the report text.
Sources(1) ▾
- U.S. Government Accountability Office, Homeowners Insurance: Premiums Generally Tracked Inflation but Rose More in Disaster-Prone Areas (Report No. GAO-26-107867) (2026-02-27) — report to the Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, examining homeowners insurance premium trends 2019-2024, state regulatory approval times for rate filings, and availability (measured via FAIR/beach insurer-of-last-resort market share) 2014-2023. Combines a 29,882-zip-code multivariate premium regression, a 32-state FAIR/beach-plan-share regression, and a 1,599-zip-code California FAIR Plan regression, plus interviews with the Federal Insurance Office, industry groups, consumer advocates, and four state regulators. Fetched directly (PDF, 43 pages) via files.gao.gov after www.gao.gov's asset host returned an access-denied page; read in full via the PDF text layer. files.gao.gov · original document
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The average U.S. homeowners insurance premium barely outran inflation from 2019 to 2024 -- up about 3%, to $2,829 a year, according to a Government Accountability Office analysis⧉ of insurer rate filings across 29,882 zip codes. That national number hides a split: coastal, high-wind, and high-wildfire zip codes rose more than 25% above inflation over the same years. 's own regression traces part of the divide to something states control directly -- how long regulators take to approve a rate change. Every additional 60 days of approval wait⧉ tracked a 0.5-percentage-point rise in the share of a state's homeowners pushed onto state-run insurers of last resort. Colorado's median wait, 331 days from 2020-2024, was the slowest in the country.