Los Angeles Fire Department firefighters fight a wildfire burning on the north side of CA-134 and CA-2 freeways, slowly backing towards homes in Glendale, Calif., Sunday, Aug. 25, 2019. The brush fire erupted near the border of Glendale and Eagle Rock and shut down the 134 Freeway in both directions, according to the Glendale Fire Department.
The report says states such as California, Florida and Louisiana – all prone to wildfires and damaging storms and flooding – are likely to see the most dramatic increases in premiums. But the fire that destroyed the Hawaiian community of Lahaina on Aug. 8, as well as the historic flooding that happened in Vermont and Maine in July, are examples of events that could drive up insurance costs for homeowners in other states.
First Street, a New York-based non-profit, has been a to-go researcher on the financial implications of climate change for years. Their research is used by Fannie Mae, Bank of America, the Treasury Department and others for understanding the potential risks to properties.There are several signs that climate change is taking its toll on the insurance industry. The U.S. homeowner’s insurance industry has had three straight years of underwriting losses, according to credit rating agency AM Best.
Goodlin, a former dental hygienist who is now executive director of the nonprofit Rebuild Paradise Foundation, said hundreds, if not thousands, of people are being hit by these rate hikes in a town being built with updated fire-safe building codes and little if any fuel to burn. She knows a homeowner whose premium is now $21,000 for a newly constructed home.
The number of homeowners covered by California’s FAIR Plan was 268,321 in 2021, almost double what it was five years before. That figure has almost certainly increased in the last two years, experts say. In Florida, Citizens Property Insurance Corp. now has 1.4 million homeowners’ policies in effect, nearly triple in five years.
Dodd was one of the key lawmakers trying to negotiate a bill in the final weeks of the state’s legislative session to address the issue. But all sides failed to reach an agreement. Mowery added that many reinsurance firms now have resources dedicated to studying the impact of climate change on how to price catastrophes.