Climate change forcing rising insurance rates - NBC Bay Area
Climate change forcing rising insurance rates - NBC Bay Area
Have you seen your homeowner’s insurance premiums rise over the past few years? That’s if you can even find coverage at all.
Climate change is making it even more expensive to live in California and putting home ownership out of reach for many – and insurance companies are now pulling out of areas where the risk of storms and wildfires is high.
The First Street Foundation released a map showing where insurance premiums could skyrocket to match the risk posed by climate change. An estimated one in four American homes or about 39 million properties are under too large of a financial risk for insurance companies to cover them.
On stage at New York Climate Week, Gov. Gavin Newsom announced he may call a special legislative session, saying, “This is an issue all across the U.S. and the globe. This is a red flag, not a yellow flag. And we are not going to be waiting until January, the next legislative session, to address it. And so we will be moving in real time with some creative ideas.”
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The implications of underinsured homes and insurance companies pulling out of California and other high-risk areas may be damaging to the overall economy and cause housing prices to drop.
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Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”