Future Uncertain
In
late May, State Farm announced
that it would stop offering new homeowner
insurance coverage throughout the state of
California, where I live. My first thought, as a
State Farm customer, was personal — what
would this mean for me?
Once
assured that my existing coverage was safe, at
least for now, I began pondering the bigger
implications of the news. What does it mean for
the state’s largest insurer to stop insuring
homes in the state? Would State Farm start
dropping existing customers, too? Would other
insurers follow their lead?
State
Farm’s decision caps a larger trend in the
Golden State. Allstate, the state’s fourth
largest property insurance provider, quietly
paused offering new homeowner, condominium, and
commercial insurance policies in in 2022. Chubb
and American International Group stopped
renewing policies for certain high value
California homes last year as well. And for
years, insurers have been declining to renew
coverage for homeowners in regions with higher
wildfire risks.
I can hardly blame
them. The devastating economic toll of climate
change has begun to come into clear view in
California. We’ve had record-breaking wildfires
that have razed entire communities. We’ve
experienced torrential rain, and the flooding
and landslides that come with it. All the while,
home prices and rebuilding costs have continued
to rise. Increasingly, the math just doesn’t add
up for private insurance companies. As former
California insurance commissioner Dave Jones told
Vox, “We’re steadily marching
toward an uninsurable future, not just in
California but throughout the United
States.”
That’s a problem. Because
it means people across the country all of us —
particularly lower-income Americans in
climate-vulnerable places — could soon be at
greater risk not only from the physical dangers
of climate change, but also from the
catastrophic economic losses that can accompany
natural disasters.
Where do we go
from here? Pricey state policies may fill in
some of the coverage gaps, but in the long term,
We will need to think bigger. We’ll need to
increase the fire-safety of our homes. We will
want to stop developing in high-risk zones. And
more likely than not, we’ll have to consider
fraught options like managed
retreat.
Zoe
Loftus-Farren
Managing Editor,
Earth Island
Journal
Photo by Blue~Canoe |
