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Tuesday, May 30th, 2023

State Farm axes new California home insurance policies citing ‘escalating risk’ of climate change: report

Author:     Alex Henderson
Source:     AlterNet
Publication Date:     May 29, 2023
 Link: State Farm axes new California home insurance policies citing ‘escalating risk’ of climate change: report
Stephan:  

I have been telling readers for more than a decade that if you live in a coastal area or where major fires increasingly occur watch what is happening with home insurance and insurance rates because my prediction is that part of what is going to drive internal migration in the U.S. is how the insurance corporations behave. They are watching the climate change data very closely and when they think the risk is greater than the reward they will first make major increases in rates and, then, just bail on insuring those areas. As a result I predict a trillion dollar crash in real estate values, and that this would particularly impact Florida because a large part of the state is going underwater. I warn readers again that if you live in such an area, take a close look at what is predicted for your area and decide to move away before the value of your property crashes because insurance companies won’t insure in your area.

Image via Creative Commons.

Florida homeowners have been facing considerable difficulty from an insurance standpoint. In early April, Tampa-based National Public Radio (NPR) affiliate WUSF-FM reported that homeowners in that state will see their property insurance rates increase by 40 percent in 2023 — despite the fact that they are already paying almost three times the national average.

But Florida is not the only state where climate change is making insurance a headache for homeowners. Axios reports that in California, State Farm will no longer accept new applications for homeowner’s insurance, effective Saturday, May 27.

State Farm cited “rapidly growing catastrophe exposure” and “historic increases in construction costs outpacing inflation” as among the main reasons for its decision. The company, however, said it will continue to honor existing homeowner’s insurance policies in California.

Axios’ Rebecca Falconer, in a report published on May 29, explains, “Multiple studies show climate change is influencing the frequency and severity of extreme weather events, increasing the risk of wildfires and also, the proportion of storms […]

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