Two advocacy groups created maps showing the decline of home insurance in areas impacted by extreme weather.
What's happening?
According to the New Mexico Political Report, Public Citizen and Revolving Door Project used data from the U.S. Treasury's Federal Insurance Office and a U.S. Senate Committee.
The map shows nonrenewal rates, cancellation rates, claim frequency rates, and more information, ZIP code by ZIP code. It reveals that these home insurance issues are not limited to coastal states.
Jesse Keenan, a sustainable real estate professor at Tulane University, said, "There isn't a place in the United States that isn't at risk from climate impacts," per Green Central Banking.
Laytonville, California., saw the biggest spike in premiums, with costs increasing 106% between 2018 and 2022. In Mokane, Missouri, the average claim amount jumped from just $4 in 2018 to $9,245 in 2022. And Okeechobee County in Florida saw a 4,236% increase in nonrenewals.
What does this mean for homeowners?
The data shows that it's increasingly more difficult to access affordable home insurance. Extreme weather and the changing climate make insurance companies less likely to cover homes in high-risk areas.
Some companies won't offer renewals or will cancel policies for homes they believe are subject to extreme weather. However, consumers are the ones losing money.
The report stated, "Insurance companies themselves are vulnerable to extreme weather, but are adept at shifting costs directly to consumers. By spiking premiums, slashing coverage, hiding their cash, and lobbying for regulatory giveaways, insurance companies can generate record profits even amidst escalating disaster costs."
Policyholders "are paying the price for climate change through higher premiums, while insurance companies continue to profit," Carly Fabian, senior insurance policy advocate at Public Citizen's Climate Program, told the New Mexico Political Report. While many homeowners rely on insurance to help them when disaster strikes, the companies are abandoning those most at risk.
The burning of oil and gas is triggering extreme weather events and climate instability. Ironically, many insurance companies invest heavily in the dirty fuel industry.
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Definitely 🙁 According to the Center for International Environmental Law, insurance companies have over $500 billion in investments in Big Oil assets. This cycle harms the public while putting more money in the pockets of insurance and oil companies.
What's being done about the lack of insurance and rising premiums?
Fabian stated, "Monitoring the availability and affordability of insurance is essential."
She explained, "This data should be a starting point for ongoing work to understand how climate change is impacting policyholders across the country … public access to data like this will tell a deeper story about how the crisis is impacting us all."
This data can be used to validate government interventions, insurance market reforms, and risk mitigation measures. New regulations can stop insurers from "cherry picking policies," as Keenan put it to Green Central Banking, making the insurance market fairer, and holding insurance companies accountable for their role in the changing climate.
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