Insurers retreat from Coastal Virginia as climate risks soar - Insurance Business
Insurers retreat from Coastal Virginia as climate risks soar | Insurance Business America
More insurers are choosing to limit their exposure to climate risks, with some major carriers now pulling out of coastal Virginia neighborhoods.
WTKR News 3 spoke to one Hampton Roads resident whose homeowner’s policy was dropped by his insurance company in June.
Fred Drummond said he was told that Nationwide would not be renewing the policy he’s had for over 20 years, adding that he spent several days calling other companies to no avail.
Drummond is not alone in this experience as major carriers continue the trend of exiting high-risk markets due to rising costs associated with natural catastrophes.
Meanwhile, in California, insurance groups have called for regulatory reform as Allstate, State Farm, Farmers, and AIG chose to stop or limit issuing homeowners policies due to wildfire risks.
“With record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business,” Farmers said of its California pullback earlier this month.
When approached by WTKR News 3, insurance agents confirmed that some major companies have gone a similar route in Virginia Beach.
“They have to reduce their overall exposure,” said Greg Acton, who works with Armor Insurance Group Insurance. “Some carriers are deciding to pull out of Hampton roads altogether or reduce the amount they are looking to insure on the coast.”
This assessment was echoed by Nancy Rodgers of Bunn Insurance Agency, who pointed to “increased storm activity and regular claims activity” in the area.
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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.”