Amidst all the catastrophic destruction caused by Hurricane Helene, we're reminded once again of the increasing frequency with which climate change is impacting both homeowners and insurance companies.
This week the focus is on Hurricanes, with Helene becoming the seventh Atlantic Hurricane to reach the U.S. since 2017. While during other weeks, the focus is on tornados and forest fires. (see earlier post: Insurance Costs Have Become The Scoreboard For Climate Change)
Insurers are raising premiums and withdrawing from high-risk areas, leaving many families unprotected. As a result, rising home insurance costs have become one of today’s most significant inflationary pressures, causing many to abandon their coverage. In Florida, approximately 20% of homeowners no longer carry home insurance, and only around one-fifth have flood insurance, showing the severity of the issue.
This will make recovery efforts even more complex and highlights how deeply intertwined climate change and the economy have become. Although there's no "silver bullet" solution to the problem, states with robust insurance commissions regulating markets tend to fare better, since strong regulations help mitigate the impact of costly litigation accelerating rate hikes.