insurance
Newsletter
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Insurers leave Maui wildfire survivors in unsafe homes, families say
Maui residents whose homes survived last year's wildfires are grappling with toxic contamination and insufficient insurance coverage to restore their homes, leaving many unable to return.
In short:
- Many Maui homeowners are battling insurers over inadequate payouts for smoke damage after the 2023 wildfires, which left homes filled with toxic residue.
- Independent experts estimate restoration costs up to four times higher than what insurers, like State Farm, are covering, leaving families displaced.
- Hawaii lacks industry standards for assessing wildfire smoke damage, leaving insurers to determine what is safe.
Key quote:
“We are not trying to make money or profit off of disaster. We just want our houses cleaned. We want to know we are safe in our homes, and we don’t know that.”
— Maria Linz, Lahaina resident
Why this matters:
As wildfires increase due to climate change, more homeowners face costly battles with insurers over smoke contamination. Without standards or regulation, families are left at risk, both financially and health-wise.
Read more: The Maui fires may cause long-term health problems
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Credit: Leonard Zhukovsky/Big Stock Photo
California plans significant changes to insurance rules as wildfires increase risk
California regulators propose major insurance reforms to address soaring costs and dwindling options for homeowners in wildfire-prone areas.
In short:
- California is considering updates to Proposition 103, which currently limits insurance rate changes, to require firms to cover high-risk areas based on market share.
- The proposal includes using "catastrophe modeling" to better assess wildfire risks, though its impact on rates is debated.
- Experts worry that while these changes may attract insurers back, they could also raise costs for consumers.
Key quote:
"We are nervous. The reality is that prices are so high already, and affordability is so low right now."
— Amy Bach, executive director of United Policyholders
Why this matters:
As wildfires worsen, Californians face fewer and costlier insurance options. These reforms could determine whether homeowners in high-risk areas can find or afford coverage. Read more: Insurance woes increase as climate change impacts profitability.
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Newsletter
Outdated FEMA flood maps leave billions in damages uninsured
Hurricane Debby caused nearly $10 billion in uninsured damages due to outdated FEMA flood maps that failed to reflect current flood risks.
In short:
- Over 75% of properties damaged by Hurricane Debby were outside areas requiring flood insurance.
- FEMA's flood maps are outdated, with some over 50 years old, leaving many homes unprotected.
- Resistance from developers and local governments has stalled updates to the National Flood Insurance Program.
Why this matters:
As climate change increases flood risks, millions of Americans are vulnerable to catastrophic losses without the necessary insurance, risking severe financial and societal impacts.
Related EHN coverage:
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Credit: Chris Gallagher/Unsplash
As climate change fuels costly weather events, insurance payouts skyrocket in the UK
Increased weather-related insurance claims have pushed UK payouts to a seven-year high as climate change worsens storm and flooding damage.
In short:
- The Association of British Insurers (ABI) reports that insurance payouts reached £1.4bn in the second quarter of 2024, driven by weather-related claims amounting to £144m.
- The UK experienced significant weather events, including four named storms, leading to economic disruptions and impacting consumer spending.
- Last year, UK insurers paid out a record £573m in weather-related claims, which is £150m more to their payouts in 2022.
Key quote:
"Urgent government action to tackle surface-water flooding and maintain flood investments and maintenance will also help reduce the future impact of flooding."
— Louise Clark, policy adviser at the ABI.
Why this matters:
Rising insurance payouts highlight the increasing financial strain climate change places on both individuals and the economy. With severe weather events becoming more frequent, there's a growing need for policies focusing on prevention and resilience to safeguard communities and reduce economic disruption.
Related: Insurance woes increase as climate change impacts profitability
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People are moving to risky areas despite climate dangers
Despite growing climate threats, over 300,000 Americans relocated to flood or fire-prone areas last year, driven by affordability and housing availability in states like Florida and Texas.
In short:
- A Redfin report shows that U.S. counties most vulnerable to floods and fires saw a population increase from July 2022 to July 2023, though some fire-prone areas in California saw a net outflow.
- Rising insurance costs due to increased climate-related disasters are making some areas unaffordable, prompting moves away from places like California's Ventura County.
- Despite risks, affordability and low taxes in Texas and Florida continue to attract residents to these vulnerable areas.
Key quote:
"In this new world, this new regime that we live in, maybe people are changing their behavior a bit."
— Elijah de la Campa, Redfin senior economist
Why this matters:
As climate change exacerbates extreme weather, more Americans face increased risks and financial burdens by moving to vulnerable areas. Understanding these migration patterns helps address the need for improved infrastructure and resilience planning in at-risk communities.
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Louisiana eases insurance cancellations, raising concerns
A new Louisiana law allows insurers to cancel more homeowners’ policies, raising premiums and deductibles and potentially increasing financial strain for residents.
In short:
- Louisiana’s Legislature approved a law permitting insurers to cancel up to 5% of longstanding policies annually.
- Consumer advocates warn the law will lead to higher premiums and increased financial hardships for residents.
- The state’s Insurance Commissioner argues deregulation is necessary to stabilize the market and attract more insurers.
Key quote:
“I speak with consumers every day. Based on what I’m hearing from them and based on my own experience, insurance becoming too expensive for homeowners isn’t a potential future event — it’s the status quo and has been for quite some time.”
— Tim Temple, Louisiana Insurance Commissioner
Why this matters:
With the new law, many Louisiana homeowners may face increased financial pressure, leading to possible foreclosures and homelessness. The law may also worsen the insurance crisis already seen in states like California and Florida.
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Credit: Tierra Mallorca/Unsplash
Climate change impacts insurance availability in high-risk areas
Increasing natural disasters driven by climate change are making insurance unaffordable or unavailable for many homeowners, especially in states like California, Florida, and Louisiana.
In short:
- Homeowners in high-risk areas struggle to find affordable insurance as companies withdraw or hike premiums.
- States offer insurers more flexibility, but risk becoming the insurers of last resort.
- Rising disaster costs and population growth in risky areas exacerbate the problem.
Key quote:
“Insurance companies have basically become our land-use officials.”
— Doug Heller, director of insurance with the Consumer Federation of America
Why this matters:
Without affordable insurance, homeowners may be forced to relocate, which could lead to broader economic and social impacts. The increasing financial strain on homeowners is just one of many symptoms of a planet under stress. For families, this isn't just about rising costs—it's about the stability and security of their homes and lives.
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