(AP&NPR) Ezra Croft has never filed an insurance claim, and his house in Raleigh, North Carolina isn't close to a stormy coastline or a fire-prone forest.
So Croft was surprised when his annual homeowner's insurance premium shot up to $1,600, or $700 dollars more than he was paying just a couple of years ago.
"I'm a middle income guy," Croft says. "Don't make a ton of extra money. At this point I'm teetering on the point of inaffordability."
Similar complaints can be heard all over the country. On average, insurance companies sought to raise homeowners' premiums by more than 11% last year, according to S&P Global Market Intelligence.
Auto insurance premiums are climbing even faster, far outpacing overall inflation.
Take Paul Morro. His auto insurance bill just jumped by $600 a year.
"Here's the kicker," Morro says. "My wife and I both work from home. So we have no commute to speak of."
He's bracing himself for the bill to insure his house, in Herndon, Va.
"It just feels like everything is rising at a scary rate," Morro says.
Why insurance costs are surging
Insurance companies insist they're just playing catch-up, after two years of big losses. For every dollar in home and auto premiums they collected last year, insurance companies paid an average of $1.10 in claims and expenses, according to the Insurance Information Institute.
"Nobody wants to have that higher-price bill," says Sean Kevelighan, the institute's CEO. But he added companies "need to price insurance according to the risk level that's out there."
Inflation is partly to blame for those big payouts. The cost of fixing or replacing damaged homes and cars has jumped sharply in recent years as a result of rising labor and material prices.
Even as those prices start to level off, though, insurers are having to contend with a mounting toll of natural disasters, and not just in the usual places like Florida and California.
Last year, there were around two dozen severe storms in the U.S. with billion-dollar price tags, spreading lightning, hail and damaging winds through many parts of the country.
"While a lot of these storms don't make national headlines, they do tend to be very costly at the local level," says Tim Zawacki, principal research analyst for insurance at S&P Global Market Intelligence. "And the breadth of where these storms are occurring is something that I think the industry is quite concerned about."
As a result, insurance premiums are likely to keep climbing this year even as overall inflation cools.
Insurers have a lot of pricing power
While state regulators have some power to limit those price hikes, insurance companies tend to get their way. Regulators know that if they move too aggressively to limit premiums, insurance companies might stop offering coverage altogether.
"The insurance companies have become really aggressive in their bullying," says Doug Heller, director of insurance for the Consumer Federation of America. "You've heard a lot about companies that are threatening to pull out of the market if they don't get what they want. Generally speaking that bullying has worked."
Last week, the Treasury Department hosted a roundtable with consumer and environmental groups to discuss the ways climate change is rattling insurance markets. The department also plans to host a meeting on the topic with insurance industry stakeholders.
Customers can sometimes save money by shopping around. Alicia Pitorri switched insurance carriers after the cost of her family's auto policy jumped more than a thousand dollars.
"It was Liberty Mutual," she says with a rueful laugh. "We've since switched to State Farm since the renewal went up so much."
Pitorri, who lives in Nashville, says while she managed to shave a few hundred dollars off the bill, she's still paying a lot more than she did two years ago.
"What can you do?" she asks. "You need insurance. You can't have a vehicle or a house without them. So you have to pay for it. And you figure out where you can cut other things to make sure you can drive around."
Going without insurance
Auto insurance is required in nearly all states. And lenders typically require homeowners who have a mortgage to carry insurance as well. Still, as premiums keep climbing, more people are scaling back their coverage or even going without.
Ezra Croft considered dropping his homeowners' coverage, but ultimately decided to pay the higher premium.
"I'm fairly good at home repairs, but if something like a tree fell on my house or a tornado or a fire, I don't know what I would do," Croft says.
A survey by the Insurance Information Institute last year found 12% of homeowners had no insurance, up from 5% four years earlier. Going without coverage is risky, though, for both individuals and communities.
"Insurance is an important product, not only for economic stability but for community resilience," says Heller. "We are very concerned that these escalating premiums are going to lead to escalating rates of uninsured drivers and homeowners, which makes us all quite vulnerable."
Regina Lawless hit a professional high at 40, becoming the first director of diversity and inclusion for Instagram. But after her husband died suddenly in 2021, she pondered whether she had neglected her personal life and what it means for Black woman to succeed in the corporate world.
While she felt supported in the role, “there wasn’t the willingness for the leaders to take it all the way,” Lawless said. “Really, it’s the leaders and every employee that creates the culture of inclusion.”
This inspired her venture, Bossy and Blissful, a collective for Black female executives to commiserate and coach each other on how to deal with misogynoir, a specific type of misogyny experienced by Black women, or being the only person of color in the C-suite.
“I’m now determined to help other women, particularly women of color and Black women, to see that we don’t have to sacrifice ourselves for success. We can find spaces or create our own spaces where we can be successful and thrive,” said Lawless, who is based in Oakland, California.
Many women in Lawless’ group have no workplace peers, making them the “Onlys” — the only Black person or woman of color — which can lead to feelings of loneliness or isolation.
“Getting together helps us when we go back and we’re the ‘only-lonelies’ in a lot of our organizations,” Lawless said.
With attacks on diversity, equity and inclusion initiatives raging, Black women looking to climb the corporate ladder face a more hostile landscape than ever. Aside from having to constantly prove themselves and talk in a manner that can’t be labeled as angry or emotional, obtaining top managerial positions doesn’t stop the double dilemma of racial and gender pay gaps. All this adds up to disproportionate representation of Black female senior leadership.
Dr. Claudine Gay’s resignation in January as Harvard’s first Black president following accusations of anti-Semitism and plagiarism was just the latest in a revolving door of Black women who have been aggressively questioned or abandoned after achieving a career pinnacle.
Black female professionals also were hit hard when an administrator at a historically Black college in Missouri accused the school’s white president of bullying and racism then took her own life. This led some to build networking groups and mentorships. For others it triggered an exodus to entrepreneurship and re-invention.
In Boston, Charity Wallace, 37, a biotech professional, and Chassity Coston, 35, a middle school principal, reflected on their own career struggles in light of Gay’s ordeal. Wallace said she was being more cognizant of her mental health, and that’s where their young Black professionals group, sorority sisters and family come in.
“It’s a constant fight of belonging and really having your girlfriends or your homegirls or my mom and my sister. I complain to them every day about something that’s going on at work,” Wallace said. “So having that circle of Black women that you can really vent to is important because, again, you cannot let the things like this sit. We’ve been silenced for too long.”
Coston said she mourned Gay’s resignation and, fearing something similar could happen to her, she reconsidered her future in education. But she didn’t want to give up.
“Yes, we’re going to continue to be scorned as Black people, as Black women. It’s going to continue to happen. But we can’t allow that,” Coston said. “I’m speaking from my strength right now because that wasn’t always how I felt in my stages of grief. We have to continue to fight just like Rosa (Parks), just like Harriet (Tubman).”
Gay struggled despite her resume full of accomplishments, Wallace said.
“I can’t imagine how she felt trying to do that and getting all these accolades, her degrees that she has, the credentials, and it just seemed like even that was not enough for her to stay,” Wallace said.
The backlash to DEI efforts is only amplified with clashes over identity politics. Pulitzer Prize-winning journalist Nikole Hannah-Jones’ tenure bid at the University of North Carolina at Chapel Hill stalled in 2021 because of her work with the 1619 Project, a collection of essays on race. The 2022 confirmation hearings for Ketanji Brown Jackson, the first Black woman confirmed to the Supreme Court, drew criticism for their harsh and race-based questioning.
President Joe Biden emphatically stating he only would consider a Black woman for the high court deepened resentment toward DEI, said Johnny Taylor, CEO of The Society for Human Resource Management.
“Contrast and compare a CEO standing in front of his workplace or her workplace saying, ‘I’m only gonna consider, the next candidates will only be this,’” Taylor said. “That created some real tension.”
Black women are questioning whether it’s even worth trying for top positions, said Portia Allen-Kyle, chief advisor at social justice organization Color of Change. Extreme scrutiny and online vitriol are high prices to pay.
“What I’ve heard from quite a few Black women — family, friends and otherwise — is a little bit of feeling of frustration at the idea that excellence is not enough,” Allen-Kyle said. “The ‘Work twice as hard, be twice as good ... maybe you’ll be able to be accepted on your merit.’ That lesson that maybe that’s not the case is hard and frustrating and disappointing all around.”
The number of Black women in the workforce is in danger of shrinking because of a lack of support and opportunities, according to advocates.
Black women comprise 7.4% of the U.S. population but they occupy only 1.4% of C-suite positions and 1.6% of senior vice-president roles, according to a 2020 report from Lean In, “The State of Black Women in Corporate America.” U.S. Census data shows Black women working year-round and full-time in 2021 made 69 cents for every dollar a white man got. Meanwhile, white women made 80 cents on the dollar.
Lawless, who left Instagram/Meta in August, thinks more Black women will decide to be their own boss rather than enter a traditional workplace.
“There’s going to be a chilling effect and you’re going to see more Black women pivot and go into entrepreneurship, which we’re already doing at higher rates,” Lawless said. “Corporations have a real problem. They’ve lost more women at the director and above level since the pandemic.”
Even self-made businesses cannot avoid DEI resistance. The Fearless Fund, a small venture capital firm, is embroiled in a lawsuit accusing a grant program for Black women-owned companies of discrimination. The litigation has scared away potential investors, according to the firm’s founders.
Job openings for diversity officers and similar positions have declined in recent months. The combined share of venture capital funding for businesses owned by Black and Latina women has dipped back to less than 1% after briefly surpassing that threshold — at 1.05% — in 2021, according to the nonprofit advocacy group digitalundivided.
Stephanie Felix, of Austin, Texas, just started her own DEI consulting firm in January. It’s not something the 36-year-old, who worked in DEI for company review website Glassdoor, initially saw for herself.
“People say there’s risk in leaving but there’s also a lot of risk in staying,” Felix said.
Colleagues, family and even Felix herself had reservations about her career leap. But she said she has too often seen DEI hires go from “office pet to office threat.” Their arrival was heralded as a new chapter, but senior leaders wouldn’t come through with promised resources or authority to effect change.
“I applaud women who choose to step away and choose themselves. I applaud myself for it too,” Felix said. “Even though it’s not easy, it gives you more sovereignty over your life which is, in my mind, definitely worth it.”