In the aftermath of extreme weather events, major insurers are increasingly no longer offering coverage that homeowners in areas vulnerable to those disasters need most.

At least five large U.S. property insurers — including Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway — have told regulators that extreme weather patterns caused by climate change have led them to stop writing coverages in some regions, exclude protections from various weather events and raise monthly premiums and deductibles.

Major insurers say they will cut out damage caused by hurricanes, wind and hail from policies underwriting property along coastlines and in wildfire country, according to a voluntary survey conducted by the National Association of Insurance Commissioners, a group of state officials who regulate rates and policy forms.

Insurance providers are also more willing to drop existing policies in some locales as they become more vulnerable to natural disasters. Most home insurance coverages are annual terms, so providers are not bound to them for more than one year.

  • AutoTL;DR@lemmings.worldBEnglish
    4·
    1 year ago

    This is the best summary I could come up with:

    Allstate said its climate risk mitigation strategy would include “limiting new [auto and property] business … in areas most exposed to hurricanes” and “implementing tropical cyclone and/or wind/hail deductibles or exclusions where appropriate.”

    Hurricane Idalia brought severe flooding to Georgia and the Carolinas, and tore through parts of Florida that had never experienced direct hits from a major storm.

    Natural catastrophes in the first six months of 2023 year in the United States caused $40 billion in insured losses, the third costliest first-half on record, Aon found.

    That can prevent firms from pricing policies that accurately reflect risk, said Daniel Schwarcz, who studies insurance markets at the University of Minnesota Law School.

    Typical home insurance policies cover damage from all manner of perils, including fire and smoke, wind and hail, plumbing issues, snow and ice, and vandalism and theft.

    “Potential changes to the frequency and/or severity of weather-related catastrophic losses pose a risk in both the short and long term,” Nationwide wrote in its survey response.

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