Editor’s note: Since this story was first published, Jody McDonald’s cabin was destroyed in a wildfire. He hopes to rebuild.
Jody McDonald thought he had his golden years all figured out. He was going to live in a cabin with his wife in Pine Valley, Utah — about an hour west of Zion National Park and only 45 minutes from their current home in St. George — spending the rest of their days nestled among pinyon pine and Engelmann spruce trees. It would make for a peaceful retirement to close out a working life that spanned nearly 50 years. A sense of security he felt was well earned.
His in-laws built the cabin, working side by side with contractors, back in 1990. McDonald and his wife then inherited it from her parents and began renovations in 2019. He gutted the kitchen and refinished it with knotty alder cabinets and stainless steel appliances. He installed new bathroom vanities, repainted, refloored. It took four years and $70,000 to chisel this dream life out of a family heirloom. When the interior felt right, McDonald worked on the landscaping. The Forest Service felled the too-close cypress and pines to ward off wayward blazes and windthrow. Any others along the perimeter of the property, McDonald trimmed up to the recommended 8 feet. Insuring the cabin had cost his in-laws around $750 a year, but like any dutiful homeowner, he shopped around for new coverage. That’s when his vision for the future started to crumble.
The first quote reached upward of $1,200. Steep, but doable. Then the provider dropped McDonald after just a few months. In December, he got a new quote from a different provider for $1,800. “We said, well, we got to do it,” he recalls. “So we did it.” That lasted another two months before a new policy revision bumped the rate up to $4,300 a year. “I’ve done everything that I could do,” he says. “But I just can’t do this. I can’t do it.”
McDonald couldn’t understand why home insurance for a cabin that’s never had a claim or endured a fire in the 35 years since it had been built had suddenly ballooned to more than five times what previous owners paid less than a decade ago. He never got a reason, either. At least not from his insurers. When he talked about it with neighbors or searched for clues on community forums, he realized how many other people — in a sleepy mountain town hundreds of miles from the dangers of rising waters on the nearest coastline — could no longer afford to insure their homes. The few who can afford insurance are likewise left in the lurch, with providers pulling out of areas deemed “high risk” in droves.
“There’s a myth that the insurance crisis is happening in Florida, Louisiana and California, and that everybody else is outside of that problem bubble. But it’s hitting the heartland of the country.”
Across the country, home insurance is the next big crisis to wallop Americans. The Consumer Federation of America, a nonprofit that focuses on consumer insight research, reports that the average homeowner saw their insurance premiums rise by 24 percent between 2021 and 2024. That increase means more and more homeowners can’t pay their premiums. So much so, the Treasury Department found that in 2022 alone, insurers dropped at least 10 percent of their policies in more than 150 ZIP codes. “There’s a myth that the insurance crisis is driven by things happening in Florida, Louisiana and California, and that everybody else is outside of that problem bubble,” says Doug Heller, director of insurance for the Consumer Federation of America. “In fact, what we’re seeing is that the insurance crisis is hitting the heartland of the country quite dramatically.” Especially in the West.
Abandoned by insurers
The Dixie National Forest consists of about two million acres of dense vegetation and scrub thriving in the middle of Utah’s arid high desert. Stretching 170 miles across its southern end, it’s the largest forest in the state. Juniper trees stand sentinel at lower elevations while aspens swath over higher terrain. Some 250,000 acres of the forest is in the Pine Valley Ranger District, while another 150,000 acres in the area consist of federal, state or private ownership — like McDonald’s cabin on the edge of the forest boundary.
That district is designated as a high-risk wildfire landscape by the Forest Service. There are 21 such high-risk landscapes across the West, one in every state west of Kansas besides Wyoming. These high-risk areas are where wildfires are considered more costly or common. That also makes them a place where homeowners typically experience the highest rates of nonrenewal by their insurance providers, when a company opts not to insure a client even if they’re willing and able to pay, usually due to living in an area with an increased chance of disaster. “More and more people are getting dropped and nonrenewed all over the country,” says Amy Bach, executive director and co-founder of United Policyholders, a nonprofit organization that advocates for policyholders. “One of the biggest tension points is that insurers are still pretty much free to decide who they want to insure and who they don’t want to insure.”
One of the reasons nonrenewal rates are rising is that climate change is causing more frequent natural disasters in new areas, which, in turn, destabilize our insurance and housing markets. Just last year, the National Oceanic and Atmospheric Administration recorded 27 disasters with at least $1 billion in damages, racking up a total price tag of $182.7 billion. More natural disasters mean more companies owe their policyholders money. That includes compensation for big picture calamities like wildfires, but also environmental issues thought to be more benign. A report published by the Senate Budget Committee last year found climate-driven insurance spikes are impacting not just hurricane or wildfire-prone areas, but other inland states — like New Mexico, Wyoming and Montana, which have comparably lower fire risk — because of worsening windstorms, thunderstorms and hailstorms.
Financial fallout and insecurity were once consequences reserved for more extreme environments. But, increasingly, any and all environments are becoming extreme. That makes it near impossible for homeowners to escape the quandary of whether it’s affordable to own property, as well as whether it’s worth it, or even possible, to protect that property. “We’re seeing dramatically higher insurance claims payments going to cover the cost of severe thunderstorms and hail than, say, wildfires or hurricanes,” Heller says. “We don’t have a good market structure to handle the risk management writ large.”
A recent report by the Consumer Federation of America found that Utah has the fastest-growing home insurance premiums in the country, rising by an average of 59 percent within the last three years. Anyone with a mortgage is required by lenders to pay for coverage. Others who own their property outright have the option to leave their homes uninsured. Since McDonald inherited his cabin and doesn’t have a mortgage, he chose to forgo insurance after his rates climbed out of reach. While more affordable now, that choice still leaves him vulnerable, without any monetary support in the event of a natural disaster or property crime. “Hopefully I haven’t made the wrong decision,” he says, unsure whether he’ll go through with those retirement plans in a few years now that he doesn’t have a safety net. “What about these people that have a mortgage, that don’t have the ability to say they’re not going to insure it? They can’t afford it. Maybe they’ll try to sell their property, but when people find out how much they want for insurance, people aren’t going to buy it. It’s just a brutal thing that’s happening. I look at it as pure evil.”
These days, those who can afford insurance are likewise left in the lurch, with providers pulling out of areas deemed “high risk” in droves.
Already, it’s estimated that more than 100 million households — 74.9 percent of households nationwide — can’t afford to own a median-priced home. When home insurance premiums skyrocket and prospective owners can’t afford them either, it further deters home ownership. Insurance providers dropping policies in high-risk areas accomplishes the same effect. When both of those issues dovetail, what’s left is a fallout that the Senate Budget Committee warns will plunge property values and cause a market collapse similar to the housing crash of 2008.
Unlike other financial catastrophes, the home insurance crisis is one that even wealth won’t solve. Regardless of the ability to afford coverage, private companies are making the collective decision to curb risk by dodging entire swaths of the country altogether. “They’ll take your premium year in and year out, tell you it’s fine to live there, and then suddenly, on a dime, these companies change. They say, forget it,” Heller says. “If we don’t take this as a national crisis for our economy, home ownership will become more unsustainable.”
Western lawmakers grapple for solutions
Frustrated homeowners may point at private insurers as the arbiters of loss, but even those companies are hemorrhaging cash. In 2023, American home insurance companies lost $15.2 billion in underwritten costs, more than at any other point this century. These losses happen when the sum that insurers pay out to policyholders exceeds the amount earned from charging premiums. Those losses occurred in 18 states — more than a third of the country — and can largely be chalked up to the damage done by increasingly unpredictable natural disasters. Inflation is at play here, too, making building materials more expensive, deepening the costs of payouts to policyholders looking to rebuild after enduring disaster.
Yet, aside from the climate-induced issues rendering the current home insurance system a loss for both insurance companies and homeowners, there are logistical hurdles to creating solutions.
Property insurance is regulated at the state level, which leaves federal agencies largely powerless to offer oversight. According to the Library of Congress, there are no federal regulators of insurance like there are for banking and securities. States have been left to manage the industry since 1945. While those regulators have done little to intervene so far, some are trying.
What’s coming will plunge property values and cause a market collapse similar to the housing crash of 2008.
Two years ago, Colorado became the first state in four decades to create a Fair Access to Insurance (FAIR) plan. The FAIR plan acts as a safety net for high-risk homeowners who are unable to find private insurance. Private insurers in the state pool money that funds the plan, which is then managed by state regulators. It’s a last-ditch effort that dates back to the 1960s, and presently, 35 states offer it as an option. Yet since it’s privately funded, when insurance providers pull out of state markets, it pulls money out of the pool and takes compensation out of the hands of homeowners. For states like California, which had to issue a moratorium to block insurers from fleeing the state after the Los Angeles wildfires burned through the city in January, that precariousness is in full view. That’s largely why it’s considered “an insurer of last resort” — it offers little coverage for a high premium, and is subject to much of the same threats that private companies face.
When even the safety net falters, states are left to find their own solutions. An analysis by the Mountain West News Bureau found that at least 13 bills have been introduced this year in seven state legislatures across the region to address the crisis. California recently passed a law requiring anyone selling a home to provide prospective buyers with a natural hazards disclosure form detailing potential or past events like wildfire, earthquake damage or flood damage that have impacted the property. Buyers are also increasingly leaning on including contingencies in their offers, so if they are not able to access or afford insurance, they’re able to back out of the deal without consequence. Homeowners in Montana can now request a wildfire risk score for insurers to use while determining whether coverage is available and, if so, at what cost. In New Mexico, a bill to create a “wildfire-prepared” certification program passed to similarly help insurers determine costs and coverage on an individual property basis — rather than lumping entire chunks of cities, counties or states in an untouchable high-risk category. Those solutions don’t necessarily help when the danger is stronger winds and bigger, meaner storms.
They also do little to help homeowners like McDonald, who have already been left stranded by insurance providers. He counts himself as one of the lucky ones: he owns a home without a mortgage, he has the freedom to forgo the costs that otherwise strangle home and business owners out of their assets. Yet as he stares down the barrel of his final working years, his dream of living in a cabin in his final years isn’t so lovely anymore. But the pine and spruce still stand, and his kitchen island is the perfect shade of blue. The cabin sits in Pine Valley, awaiting whatever disaster might come.
Correction: An earlier version of this story stated that Jody McDonald and his wife began renovations to their cabin four years ago and that the insurance premiums they paid were monthly. The McDonalds began renovations on their cabin six years ago and the insurance premiums were yearly.
This story appears in the July/August 2025 issue of DeseretMagazine. Learn more about how to subscribe.