As hurricanes, floods, and wildfires fueled by climate change wreak havoc on communities, car insurance rates are beginning to skyrocket, leaving drivers grappling with rising costs, Inside Climate News reported.
What's happening?
Extreme weather events have always existed, but scientists agree that human-induced climate change is supercharging these disasters, making them more powerful and destructive.
According to an August report from Insurify, the average annual cost of full-coverage auto insurance reached $2,329 in June, a 15% increase from 2023, with projections estimating $2,469 by year-end. States like California, Missouri, and Minnesota, vulnerable to wildfires and storms, could see rates climb over 50%.
The costs are linked not just to the disasters themselves but to smaller weather events like heavy rain, hailstorms, and flash floods that follow. "It's actually secondary perils that are really having a dominant influence on driving up insurance costs," Andrew Hoffman, a sustainability professor at the University of Michigan, told Inside Climate News.
In 2023, the U.S. faced $92 billion in damages from extreme weather, including over 90,000 car insurance claims filed by Floridians after hurricanes Helene and Milton, according to The Palm Beach Post. But insurance doesn't cover all losses. Globally, only $95 billion of the $250 billion in damages was reimbursed, Reuters reported.Â
Why do high insurance costs matter?
Skyrocketing insurance rates could deepen economic inequalities, especially for low-income drivers who may be left uninsured or forced to relocate to states with cheaper premiums. This displacement could weaken community ties and leave people less prepared for future disasters.
High costs also affect the auto market. For instance, one Florida dealership lost 672 insured Kia cars to Hurricane Helene and had to pay $3.5 million in deductibles. According to Inside Climate News, such incidents increase the likelihood of scammers reselling flood-damaged cars to unsuspecting buyers.
For individual drivers, unaffordable insurance may force them to abandon their cars, potentially leaving them without a safe means of evacuation during future climate emergencies.
What's being done about it?
Federal and state programs are stepping in to help. The Federal Emergency Management Agency offers financial assistance for uninsured disaster-related vehicle losses, and many states, including New York, California, and Florida, provide disaster recovery resources online.
Organizations like Extreme Weather Survivors also offer community support to those affected.
Drivers can take steps to disaster-proof their vehicles, such as using waterproof covers, parking in elevated spaces, and installing flood detection systems. Switching to electric vehicles may also offer savings, as some insurers provide discounts for EVs.
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