If a summer of record-breaking heat around the world didn’t convince you that climate change is real, maybe your insurance bill will.
Yes, insurance companies – hardly bastions of radical thought – are starting to account for the increasing cost of the damages wrought by a warming planet, raising rates and refusing to even cover homes in some areas.
The First Street Foundation, a nonprofit that has been studying the financial implications of climate change for years, found that the cost of storms, floods, and wildfires resulting from climate change, already in the tens of billions of dollars, will grow far worse in just the next few decades. First Street identified a host of troubling signs, including insurers going bankrupt due to staggering losses or pulling out of risky markets in states like California, Florida, and Louisiana.
That has left homeowners to turn to insurers of last resort, who in turn are raising rates to cover their growing exposure. For an increasing number of homeowners, insurance is simply unaffordable. In all, more than 40 million homeowners can expect markedly higher rates or loss of insurance altogether in the coming years, First Street predicts.
In areas where wildfires are becoming more prevalent, it’s expected that over the next 30 years, the number of buildings that will be destroyed will double to more than 34,000. Average premiums for flood insurance have already doubled in 12 states, not just coastal ones where rising sea levels and more powerful hurricanes fueled by warming ocean waters are wreaking havoc, but in inland ones like Kentucky, South Dakota, and West Virginia, where precipitation flooding is increasingly a problem.
The consequences go beyond insurance or the financial ruin that can come without it. The value of people’s homes is in jeopardy, too, as the real estate market corrects for the cost of insurance and risk. The result: a real estate bubble that in the not-too-distant future will burst, leaving people, especially those with high mortgages, underwater financially.
Weaselly politicians who for years have denied global warming as a hoax or scoffed at the idea that human activity has anything to do with it will no doubt blame the insurance companies. But the reality is that losses are growing and will continue to grow. Something has to give in an industry whose very foundation is the spreading of risk to large groups of ratepayers.
Just a few weeks ago, we watched as most of the contenders for the Republican presidential nomination showed off their denialism in their first debate. They, and the deniers in Congress and state legislatures, need to get out of the way and acknowledge that humans must and can tackle this problem. It starts with the admittedly difficult but not impossible task of weaning us off oil, gas, and coal. We need a national strategy, modeled perhaps after New York’s Climate Leadership and Community Protection Act, which sets clear goals and timelines for a clean-energy future.
Yes, other big fossil fuel-consuming nations like China and India need to get on board, too. And no, the effects of climate change won’t be stopped or reversed immediately even with a massive, concerted international effort. And yes, we should have heeded the warnings of scientists who saw this coming decades ago.
But science is telling us now that it’s not quite too late. And Washington needs to listen, now.
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