Home Insurance is one area where everyday Americans are feeling the impact of climate extremes in their pocket books.
Starting in the obvious places like Florida, California, Texas, and Louisiana, but now working its way up the east coast as more and more powerful storms keep pounding vulnerable areas, but the rubes keep moving in.
Last week’s bureau filing offered stark differences in proposed increases depending on where a homeowner lives. The bureau proposed an increase of 99.4% for properties in the beach areas within Brunswick, Carteret, New Hanover, Onslow and Pender counties — where structures are at greater risks from storms. Proposed increases on inland properties in those same counties would be 71.4% or 43%, depending on the ZIP code.
The bureau’s proposals in nearly a dozen far northwestern and far western counties, however, ranged from 4.3% to 8.5%. Proposed premium increases in Raleigh and Durham (39.8%), Greensboro and Winston-Salem (36.6%) and Charlotte (41.3%) were higher.
Despite spending decades in the insurance industry, a few years ago I found myself in a position I never thought I’d be in: uninsured after heavy rains flooded my basement with sewage and untreated stormwater. More than a year later, I still lack the resources to return home.
I’m not alone. As my home state of Connecticut and the Northeast get battered by another storm, more and more individuals, communities, and even states in climate-vulnerable areas are being abandoned by insurance companies. Others, post-disaster, find they were inadequately insured as companies shift risk through low property value assessments or new coverage exclusions. As billion-dollar disasters become more frequent, too many people are left traumatized by the devastating shortcomings of the insurance industry.
Homeowner insurance premiums have been skyrocketing across the nation, with insurers doubling premiums and limiting coverage — insurers are proposing a whopping 42% rate increase in North Carolina, for example. Regulators, lawmakers, and everyday Americans need to ask why these companies pass on climate costs to consumers while continuing to breathe life into the very industry responsible for climate change.
Without insurance, the industries polluting communities across the U.S., especially communities of color, and heating up the entire planet could neither be built nor continue business as usual. Instead, insurance companies like Travelers, W.R. Berkley, and Liberty Mutual continue to insure new fossil fuel projects, designing loopholes in their climate commitments to do so, while insurers like State Farm and Berkshire Hathaway provide crucial support through their significant fossil fuel investments. Insurers also get help from fossil fuel industry lobbyists and trade associations that work to hinder climate-related regulations.
As insurers continue to fuel the crisis, low-income and communities of color will be hit first and hardest by the devastating impacts of climate change. Due to a history of government-sanctioned racist policies such as redlining and restrictive covenants, these communities face heightened exposure to climate impacts like wildfires, flooding, hurricanes, and sea-level rise. Living in the wake of fossil fuel devastation now comes with the added insult of disappearing coverage and unaffordable insurance costs.
That’s an odd way to put it. Insurance can’t do anything about actual increased risk and the rising cost of rebuilding. And a lot of the people who “shop around” for cheaper rates will probably get what they pay for.