The mix of climate-related disaster risk and stressed insurance companies has created a crisis in the insurance industry across the United States.
What's happening?
Reports by the Senate Committee on the Budget and Congressional Joint Economic Committee confirm what many homeowners have long known: Insurance coverage is increasingly harder to find, and premiums are spiking.
In 2024, 1.9 million policies were not renewed, Grist reported, and premiums soared 44% from 2011 to 2021 — plus 11% in 2023. It's the result of "massive financial liabilities" incurred by insurers and reinsurers, which are raising prices that are being passed on to consumers.
"Climate change is no longer just an environmental problem," Sen. Sheldon Whitehouse, budget committee chair, said at a hearing. "It is an economic threat, and it is an affordability issue that we should not ignore."
Why is this important?
Florida, Louisiana, and California are among the worst-off states. Sunshine State homeowners' annual premiums rose $1,272 from 2020 to 2023. The counties with the highest rates of nonrenewal were flood-prone, wildfire-prone, or both, according to Grist.
Citizens in the least-affected state, Michigan, still experienced premium increases of $136 per year.
"The model of insurance as it stands right now isn't working," an anonymous JEC analyst told Grist.
"This isn't a red or blue state issue. It's widely applicable across the nation."
What's being done about the insurance crisis?
Policies of last resort under state-run agencies can be too costly, while proposals for the federal government to become a re-insurer in teetering markets and tax credits to homeowners for mitigating the risk of catastrophic damage to their properties have stalled in Congress.
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Definitely 🙁 With extreme weather showing no sign of abating, the solution is to change the equation. Reducing the production of planet-warming pollution can cut the risks associated with the rising global temperature.
Changes you can make at home include unplugging energy vampires, switching to electric yard tools, installing a heat pump or solar panels, and using less plastic. Walking, biking, and using public transportation are other small steps that add up to make a big difference.
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