More Bad News for Home Insurance

Don’t think of an elephant.
And don’t think about the increasing costs of natural disasters.

Project 2025 has the solution for a spiking weather disasters.

New York Times:

Just months after fires devastated parts of Los Angeles, one of the leading home insurers in California, State Farm, is temporarily raising rates 17 percent.

The sharp jump, after a 20 percent rate increase last year, is sure to strain family finances in what is already one of the nation’s most expensive states for home insurance.

It is also just the latest example of the indirect but increasingly costly ways that climate change is affecting the American economy.

An insurance crisis is spreading across the country as extreme weather and rising seas batter homes and businesses. As Christopher Flavelle and Mira Rojanasakul reported throughout last year, insurance companies are pulling back coverage, homeowners are paying more and states are struggling to prop up an industry that is tottering as the planet rapidly heats up.

“Insurance is the climate crisis canary in the coal mine, and the canary is dying,” said Dave Jones, director of the Climate Risk Initiative at the University of California, Berkeley, Center for Law, Energy and the Environment.

Nowhere is the crisis more acute than in California.

Even before the fires struck Los Angeles, state officials were scrambling to stop insurers from abandoning the California marketas wildfires grow more frequent and destructive.

The Los Angeles fires only made the risks to homeowners, and insurers, more apparent. The total economic toll of the fires, including property damage and longer term economic losses, is expected to top $250 billion, according to AccuWeather, making it one of the most expensive disasters of all time.

Carmen Balber, the executive director of Consumer Watchdog, an advocacy group that opposed the rate increases, told Rukmini Callimachi that the increase “adds insult to injury,” noting that many homeowners insured by State Farm have reported problems collecting payouts following the Los Angeles fires.

In a statement published on its website, State Farm said “we remain focused on helping our customers recover from the wildfire,” and that it had paid $3.51 billion in claims from the fires.

And it is this confluence of problems — more frequent disasters, insurers deeming some markets too risky and rising prices for consumers — that is only becoming more common.

“We’re going to continue to see substantial rate increases across the country and even more acute increases in areas that have been hit hardest by climate change, like Florida and the West,” Jones said. “No place is immune to this.”

Why the insurance market is strained

The cost of catastrophe is rising fast. Last year, financial losses related to disasters reached a high of $151 billion, according to Verisk, a data provider for the insurance industry.

In the United States alone, there were at least 27 weather eventsthat resulted in damages of at least $1 billion, according to data from the National Oceanic and Atmospheric Administration. (The Trump administration has said it will no longer collect this data.)

And with global temperatures still rising and the Trump administration slashing efforts to stop the pollution that is driving climate change, a difficult situation is poised to get worse.

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Project 2025 has a solution –

Utility Dive:

The Billion Dollar Weather and Climate Disaster product is one of many databases NOAA is discontinuing amid the Trump administration’s ongoing targeting of climate-related programs and funding. President Donald Trump’s 2026 fiscal year budget proposal, released last Friday, calls for reducing NOAA’s overall budget by $1.52 billion, with most of the cuts to climate-related research, data, and grant programs, “which are not aligned with Administration policy ending ‘Green New Deal’ initiatives,” the budget proposal states.

The database has been an important data source for state and local governments to monitor public and private costs associated with climate disasters, according to Jesse Keenan, associate professor and director of the Center on Climate Change and Urbanism at Tulane University. The database tracked “very complicated systems of systems associated with measurement and instrumentation,” he said.

Cities and states could attempt to track the information on their own, but much of the data is only collected by the federal government, Keenan said.  

“This data has been vital for local planning, budgeting, and informed policy decisions,” said Noah Fritzhand, research fellow for the Center for Climate & Security, in an email. “This elimination hurts our communities by reducing transparency and could hinder local government’s ability to advocate for federal resources or mitigate future risks effectively.”

NOAA Web page – May 21, 2025:

In alignment with evolving priorities, statutory mandates, and staffing changes, NOAA’s National Centers for Environmental Information (NCEI) will no longer be updating the Billion Dollar Weather and Climate Disasters product. Additional details and the opportunity to submit comments are available at the NESDIS Notice of Changes website. All past reports, spanning 1980-2024, and their underlying data remain authoritative, archived, and available via the Billion-Dollar Disasters dataset landing page.