Insurance companies are standing to lose a massive sum of money this year thanks to our swiftly changing climate and the severe weather it brings.
What's happening?
According to Business Insider, insurers are set to lose $135 billion in 2024, the fifth straight year in which they have posted losses of at least $100 billion. The Swiss Re Institute, which released the study, noted the vast majority of the losses are due to severe weather events around the globe.
The United States accounts for roughly two-thirds of that $135 billion, with Hurricanes Helene and Milton accounting for $50 billion of the losses alone. Severe thunderstorms accounted for $51 billion, the second-highest total from that particular weather pattern in history, while flooding in the Middle East and Europe led to $13 billion in losses.
Why are climate-related insurance losses important?
As the global climate rises, our weather patterns become less and less predictable. Areas receive less consistent precipitation, and bigger storms dump immense quantities of water on them in short periods of time. Hurricanes get stronger due to the temperature fluctuations in the oceans where they're created.
As a result of these stronger weather patterns, homes and businesses around the world suffer more damage, driving insurance companies to pay out more and more money.
The result of that is what we've seen in recent months and years: insurance companies charging massive premiums to residents in areas that have been impacted by climate-related disasters, or refusing to insure those areas entirely.
What's being done about insurance losses and climate change?
The best way to solve this problem is to slow the rate at which our planet is heating up. That means reducing carbon and methane production, finding ways to remove those elements from our atmosphere, and working to implement policies and procedures that will incentivize businesses to follow green energy laws.
In the short term, we're already seeing what insurance companies are doing to try to avoid those losses.
In Texas, prone to hurricanes along its coast, they're charging astronomical rates to people looking to get their homes insured. In Florida, where people are trying to rebuild after Helene and Milton, they're dropping coverage with little to no explanation. The same goes for many other states, such as Colorado, which has a high risk of wildfires and has seen some insurance companies outright refusing to insure homes.
While we wait for legislation to help ensure that folks can maintain their homeowners insurance, the best thing we can do is work to cool our planet.
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