Can State Home Insurance Plans Afford the Next Major Climate Disaster? - Bloomberg
Can State Home Insurance Plans Afford the Next Major Climate Disaster? - Bloomberg
State Home Insurance Programs Are Sitting on $1 Trillion in Risk
On today's Big Take podcast: the growing risk of climate disasters is pushing more people into home insurance "plans of last resort.” But are these plans ready to cover the costs of the next major catastrophe?
Listen to the Big Take podcast on iHeart, Apple Podcasts, Spotify and the Bloomberg Terminal.
As climate risks grow, some private home insurance providers are retreating from US regions most vulnerable to catastrophe. And homeowners who can’t get coverage through the private market are increasingly turning to insurance “plans of last resort,” created by states.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”