Home Insurance Companies Only Protect Themselves from the Climate Crisis

A row of mailboxes tagged with evacuation notices during the Oak Fire.

The past few years have seen a huge increase in climate disasters. Wildfires across the West Coast and in Hawaii, mass power outages due to extreme cold in Texas, temperature warnings due to extreme heat in Arizona, and hurricanes powerful enough to reach California, are all symptoms of the growing climate crisis.

The costs from climate disasters have skyrocketed. The number of natural disasters causing over a billion dollars worth of damage has doubled, on average, since the early 2000s. Every year brings another record-breaking disaster. The year 2022 alone saw almost 500 people die due to natural disasters in the U.S. and over 165 billion dollars worth of property destruction – meaning homes lost and lives ruined.

The destruction has gotten bad enough that insurance companies are accounting for a much higher probability of extreme weather when calculating their premiums. Insurance companies are raising rates higher and higher in response to natural disasters. Some companies have simply stopped supplying insurance altogether. In California, Allstate and State Farm have limited the number of new home insurance policies they offer due to the risk of wildfires. In Florida, AAA simply dropped some home insurance policies they deemed to be too high risk, refusing to renew people’s longtime insurance plans and leaving people uninsured.

The response of insurance companies to the climate disasters is an example of how the corporations and the rich will respond to the climate crisis: by protecting profits and leaving workers to suffer the consequences. Raising premiums and dropping unprofitable policies keep the profits of the insurance giants safe, while we are left to pay for the climate crisis caused by their system of capitalism.