Home insurance companies are pulling out of more states, blaming climate change

[Joe Republic]

At first glance, Dave Langston’s predicament seems similar to headaches facing homeowners in coastal states vulnerable to catastrophic hurricanes: As disasters have become more frequent and severe, his insurance company has been losing money. Then, it canceled his coverage and left the state.

But Mr. Langston lives in Iowa.

Relatively consistent weather once made Iowa a good bet for insurance companies. But now, as a warming planet makes events like hail and wind storms worse, insurers are fleeing.

...

The insurance turmoil caused by climate change — which had been concentrated in Florida, California and Louisiana — is fast becoming a contagion, spreading to states like Iowa, Arkansas, Ohio, Utah and Washington. Even in the Northeast, where homeowners insurance was still generally profitable last year, the trends are worsening.

In 2023, insurers lost money on homeowners coverage in 18 states, more than a third of the country, according to a New York Times analysis of newly available financial data. That’s up from 12 states five years ago, and eight states in 2013. The result is that insurance companies are raising premiums by as much as 50 percent or more, cutting back on coverage or leaving entire states altogether. Nationally, over the last decade, insurers paid out more in claims than they received in premiums, according to the ratings firm Moody’s, and those losses are increasing.

...

“Insurance is where many people are feeling the economic impacts of climate change first,” said Carolyn Kousky, associate vice president for economics and policy at the Environmental Defense Fund. “That is going to spill over into housing markets, mortgage markets, and local economies.”

...

“Climate change is real,” said Bill Montgomery, chief executive of Celina Insurance Group, one of the companies that has left Iowa in the past year. “We can’t raise rates fast enough or high enough.”

Secura Insurance used to sell homeowners coverage in Iowa and nine other states. On Feb. 1, the company began dropping all its homeowners outside its home state of Wisconsin. Next year, it plans to start dropping its customers there, too.

The decision was driven largely by increasingly erratic weather, said Kristin Heiges, a spokeswoman for Secura. “The volatility has been all over the place,” she said.

[jojoju1998]

Considering what my economics/political science professor said about health insurance, in the future, we might as well have the Government take over car, home, and health insurance.

It's obvious that private entities can not manage the balooning costs.

[Open Source Intelligence]

You can't discount economic effects. Auto insurers past few years have been getting killed to the point it was a drag on official government statistics, and the reasons there were a combination of higher labor costs, shortage of shops, parts are more expensive, more complicated cars, and having to deal with more lawyers in accidents. Home insurers would be affected by all those.

[MasterJedi]

We can also blame Florida, 80% of homeowners insurance fraud comes from the state. Screwing us in more than one way.

[GP270watch]

 All of this was predicted and people didn't listen. Insurers were saying this at least 10 years ago that more frequent and extreme weather events would cause higher premiums. The fact we have a for-profit insurance industry that is only semi-regulated doesn't help either.

  Florida is currently going through a home insurance crisis. The Republicans have countered this by making home insurance a defective product, one that won't cover a significant portion of your actual losses. DeSantis and the Florida GOP are also kicking people off Citizens which is the insurer of last resort and sending those customers to some fly by night insurers who would probably be wiped out and need State and Federal intervention anyways with a major weather event.

 

[Badger]

You can't discount economic effects. Auto insurers past few years have been getting killed to the point it was a drag on official government statistics, and the reasons there were a combination of higher labor costs, shortage of shops, parts are more expensive, more complicated cars, and having to deal with more lawyers in accidents. Home insurers would be affected by all those.

This is a thread about home ownership insurance, not car insurance. But thanks for playing.

[Yoda]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

[Obama24]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

It's funny, actually I see right wingers use "Look Obama or so and so bought a coastal home" as "evidence" that climate change is "false."

It'd be nice if they saw this, about insurance companies pulling out of areas where it is going to be a problem.

As to your second paragraph, I think it's a bit late in the game for coastal or low lying areas like Florida or for that matter most of the East Coast sadly. I don't see any major action such as sea walls being undertaken anywhere.

[Yoda]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

It's funny, actually I see right wingers use "Look Obama or so and so bought a coastal home" as "evidence" that climate change is "false."

It'd be nice if they saw this, about insurance companies pulling out of areas where it is going to be a problem.

As to your second paragraph, I think it's a bit late in the game for coastal or low lying areas like Florida or for that matter most of the East Coast sadly. I don't see any major action such as sea walls being undertaken anywhere.

I agree this is true. I'm just saying that if Florida not only does nothing to be proactive about climate change, but actively pursues policies that hasten and worsen it effects, they won't be entitled to one dollar of federal bailout money when their coasts start flooding regularly and they come to the feds (funded by rich blue states) with their hand out b/c they need the money to prevent a total collapse of the home insurance market.

Also, where do the Obamas have a coastal home? And do right wingers realize that if the Obamas' house falls into the ocean, they are worth hundreds of millions and can simply buy a new one?

[Open Source Intelligence]

You can't discount economic effects. Auto insurers past few years have been getting killed to the point it was a drag on official government statistics, and the reasons there were a combination of higher labor costs, shortage of shops, parts are more expensive, more complicated cars, and having to deal with more lawyers in accidents. Home insurers would be affected by all those.

This is a thread about home ownership insurance, not car insurance. But thanks for playing.

Labor, materials, and real estate effects for repairs/replacement apply to home ownership insurance do they not?

[lfromnj]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

Florida Republicans are relatively more moderate on climate change to begin with than the national GOP.

But even if Florida started elected Democrats it doesn't make a big difference in the grand scheme of things. Maybe they can lower emissions of Florida by 10 percent but how much does that matter overall?

Really whats more important is for both California and Florida to stop trying to bully insurance companies using their weight as large states .

[MasterJedi]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

Florida Republicans are relatively more moderate on climate change to begin with than the national GOP.

But even if Florida started elected Democrats it doesn't make a big difference in the grand scheme of things. Maybe they can lower emissions of Florida by 10 percent but how much does that matter overall?

Really whats more important is for both California and Florida to stop trying to bully insurance companies using their weight as large states .

They need to stop doing it alone and get the full force of the federal government to bring them to heel and work like they’re supposed to. No more fairytale libertarian “free market” stuff.

[lfromnj]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

Florida Republicans are relatively more moderate on climate change to begin with than the national GOP.

But even if Florida started elected Democrats it doesn't make a big difference in the grand scheme of things. Maybe they can lower emissions of Florida by 10 percent but how much does that matter overall?

Really whats more important is for both California and Florida to stop trying to bully insurance companies using their weight as large states .

They need to stop doing it alone and get the full force of the federal government to bring them to heel and work like they’re supposed to. No more fairytale libertarian “free market” stuff.

Insurance companies are losing money in FL/CA. You can fix climate change which increases costs/variance but the simple fact is that they still need to raise prices until that issue is fixed. You can check their financials and profitability is quite low with a combined ratio often exceeding 100%.

[Beet]

No, what Florida needs to do is vote Democratic. If Florida voted Democratic at the national level, the Democrats would be in a much better position to tackle climate change nationally and internationally.

[NYSforKennedy2024]

No, what Florida needs to do is vote Democratic. If Florida voted Democratic at the national level, the Democrats would be in a much better position to tackle climate change nationally and internationally.

Please explain how this is DeSantis’ fault and not corporate greed?

[quesaisje]

You can't discount economic effects. Auto insurers past few years have been getting killed to the point it was a drag on official government statistics, and the reasons there were a combination of higher labor costs, shortage of shops, parts are more expensive, more complicated cars, and having to deal with more lawyers in accidents. Home insurers would be affected by all those.

This is a thread about home ownership insurance, not car insurance. But thanks for playing.

Car insurance is also up a lot, to the point that it's getting discussed as an important driver of some of the more recent inflation numbers. It's been in the financial news for a while and NYT ran an article on it yesterday. Silver lining is that one of the recent inflation drivers isn't something fundamental, just a delayed response to events that we are many months past.

[DrScholl]

Building in fire hazard areas, flood plains, etc. is responsible for a lot of this. Granted climate change has sped up the risky conditions in these areas it still is a testament to how single family homes and the excessive need for home ownership as a badge of legitimacy has been problematic. If you can't get insurance then there is no point in owning a home.

[Joe Republic]

A lot of comments in this thread have been focused on flood/hurricane-prone Florida and wildfire/earthquake-prone California.  I would point out that the article in the OP is talking about insurers pulling out of previously profitable states like Iowa and Wisconsin.

[Badger]

You can't discount economic effects. Auto insurers past few years have been getting killed to the point it was a drag on official government statistics, and the reasons there were a combination of higher labor costs, shortage of shops, parts are more expensive, more complicated cars, and having to deal with more lawyers in accidents. Home insurers would be affected by all those.

This is a thread about home ownership insurance, not car insurance. But thanks for playing.

Labor, materials, and real estate effects for repairs/replacement apply to home ownership insurance do they not?

Yes. You are so close now.

[Badger]

You can't discount economic effects. Auto insurers past few years have been getting killed to the point it was a drag on official government statistics, and the reasons there were a combination of higher labor costs, shortage of shops, parts are more expensive, more complicated cars, and having to deal with more lawyers in accidents. Home insurers would be affected by all those.

This is a thread about home ownership insurance, not car insurance. But thanks for playing.

Car insurance is also up a lot, to the point that it's getting discussed as an important driver of some of the more recent inflation numbers. It's been in the financial news for a while and NYT ran an article on it yesterday. Silver lining is that one of the recent inflation drivers isn't something fundamental, just a delayed response to events that we are many months past.

Car insurance isn't going up due to global warming. At least a no direct fashion I'm aware of, like the way increased weather operations are making home insurance increasingly unprofitable.

[MasterJedi]

A lot of comments in this thread have been focused on flood/hurricane-prone Florida and wildfire/earthquake-prone California.  I would point out that the article in the OP is talking about insurers pulling out of previously profitable states like Iowa and Wisconsin.

80% of homeowner insurance fraud comes from Florida. It’s one reason why Florida is mentioned so much, besides the fact how low lying a lot of the state is.

[SInNYC]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

They will probably go for door number 3:
Provide a junk insurance option that is not sufficiently capitalized. After the first hurricane where that insurance is unable to pay, raise hell about DC doing nothing to help. And throw in gratuitous references to woke DC politicians helping the minority of the day over real Americans.

[Yoda]

Those darn woke insurance companies /s

Seriously though, as has already been mentioned, insurers have been factoring climate change into their models for at least two decades now. Republicans can stick their fingers in their ears and call it a "hoax" like their orange cult leader does all they want, but the science is irrefutable and money doesn't lie.

Florida has two choices. They can stay on their current path, keep electing Republicans, keep repressing renewable energy and promoting Big Oil and watch their state be half under water by the middle of the century, with stratospheric insurance rates for the houses that remain above sea level. Or they can radically change course and do everything possible to address climate change. When they choose the former (we all know they will), they will not get one red cent from the federal government to fix their s*** hole state.

They will probably go for door number 3:
Provide a junk insurance option that is not sufficiently capitalized. After the first hurricane where that insurance is unable to pay, raise hell about DC doing nothing to help. And throw in gratuitous references to woke DC politicians helping the minority of the day over real Americans.

I think you're probably right that this is what will happen, which actually makes me thankful that the word "bailout" has been so thoroughly weaponized in American politics post-2008. It will be pretty easy for the anti-bailout forces in Congress to paint this as the rest of the country bailing out an irresponsible state that planned all along on having the other 49 states pay it's bills when disaster inevitably struck.

[politicallefty]

A lot of comments in this thread have been focused on flood/hurricane-prone Florida and wildfire/earthquake-prone California.  I would point out that the article in the OP is talking about insurers pulling out of previously profitable states like Iowa and Wisconsin.

I always feel like the earthquake argument with respect to just California is a misnomer. California gets some tremors here and there, but it gets off pretty well when you look at the larger Ring of Fire. Loma Prieta and Northridge are the major earthquakes of consequence since 1906. I don't know what LA has done, but the Bay Area has taken significant efforts to prepare for the worst. It doesn't have to be horrifically expensive either. Japan is probably the model for the world in terms of earthquake preparedness. All of that doesn't even factor in the fact that the most worrisome areas for a massive earthquake are off the Juan de Fuca Plate and the New Madrid Seismic Zone, well beyond California's borders.