Climate Insurance Crisis | Energy Central

NYT: “How the climate crisis became an insurance crisis.” While this story was published in mainstream media, I think it is worth emphacizing that climate shocks will hit housing insurability + economic value. “Last year, insurers lost money on homeowners coverage in 18 states, up from 12 states five years ago and [8] states in 2013.” Over the last decade—nationally—’insurers paid out more in claims than they received in premiums, and, since 2018, more than 1.9 million home insurance contracts nationwide have been dropped.’ And this is not just due to wildfires in California + hurricanes in Florida. In what might be called the Iowa effect, ‘even in formerly low-risk places like that state, insurers are raising premiums, restricting coverage or simply leaving.’ Climate change isn’t the only culprit. “State regulation, the rising cost of construction, fraud and litigation, and even changes to the global reinsurance market all play a role.” Under President Biden, “the Treasury Department laid the groundwork to gather data about climate change’s effects on the insurance market, then backed off in the face of pressure from states and insurers.” Some of the most exaggerated premium increases are in states Trump carried in November, so it is unclear how he will deal with this issue when he reaches office again. ‘Fewer prospective buyers means home values are likely to fall in areas where insurance becomes especially expensive or hard to get.’ With property insurance not affordable or even achievable, home values drop. Mortgages become unavailable. Buyers become scarce. I have long argued that climate change will ultimately become real to people not because of atmospheric + oceanic heat waves, increasingly frequent grid outages, or loss of coral + biodiversity. Instead, as Senator Sheldon Whitehouse, Democrat of Rhode Island and chairman of the Senate Budget Committee, stated in a recent hearing: “It actually is coming through your mail slot, in the form of insurance cancellations, insurance nonrenewals and dramatic increases in insurance costs.”