A new report has revealed the concerning relationship between the effects of Earth's rising temperature and insurance policies in New Jersey.
What happened?
NJ Advance Media reported that the Garden State ranked eighth in the country in nonrenewal rates for insurance policies at nearly 70%, jumping from 0.5% in 2018 to 0.8% in 2023.
The publication pulled the data based on a report published by the Senate Committee on the Budget in December. The committee collected data from 23 insurance companies, which cover around 65% of the homeowners insurance market nationwide.
The analysis also found that three New Jersey counties — Cape May, Hudson, and Atlantic — were among the top 100 counties with the highest nonrenewal percentage from 2018 to 2023 (with a minimum of 10,000 policies).
Of that trio, Hudson had the highest average change in premium cost, which spiked by $1,249 during that period.
"The three counties that are driving the New Jersey story ... all suffered significant damage during Hurricane Sandy, and so there might be cause and effect there," professor Clinton Andrews of Rutgers University told NJ Advance Media. "We have direct fairly recent experience, within the last dozen years, of billion-dollar damages."
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Why are these trends concerning?
As a state bordering the Atlantic Ocean, New Jersey is particularly vulnerable to hurricanes, coastal erosion, and flooding. NJ Advance Media also noted the state's susceptibility to wildfires after a dry season.
These climate-related extreme weather events will only become more pronounced as the planet's overheating reaches new heights. As such, families will continue to struggle to cover their homes in the event of natural disasters.
"There is a message that comes through, which is that insurers are leaving a lot of the riskier markets because they perceive it to be risky," Andrews said. "There's also a sort of a standard pattern of first they raise premiums and then eventually they exit that market."
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What's being done about the insurance crisis in New Jersey?
Tim Evans, the director of research for the nonprofit New Jersey Future, believes that public officials will need to implement a strategy to protect homeowners hung out to dry by private insurers.
They could look to Florida, which has increased the burden on its state-run insurance program but is seeking solutions to alleviate the issue.
"They're doing it because they have no choice," Andrews said. "New Jersey isn't there yet, but it could go in that direction."
Based on that prognostication, one sentence from the Budget Committee report stands out in particular: "Unless the United States and the world rapidly transition to clean energy, climate-related extreme weather events will become both more frequent and more violent, resulting in ever-scarcer insurance and ever-higher premiums."
To do your part, consider using less plastic or investing in energy-efficient appliances to reduce your reliance on dirty fuels.
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