In the aftermath of extreme weather events, major insurers are increasingly no longer offering coverage that homeowners in areas vulnerable to those disasters need most.
At least five large U.S. property insurers — including Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway — have told regulators that extreme weather patterns caused by climate change have led them to stop writing coverages in some regions, exclude protections from various weather events and raise monthly premiums and deductibles.
Major insurers say they will cut out damage caused by hurricanes, wind and hail from policies underwriting property along coastlines and in wildfire country, according to a voluntary survey conducted by the National Association of Insurance Commissioners, a group of state officials who regulate rates and policy forms
More than 30 insurers have left the state or limited their coverage options in the past three years, and more are expected to leave soon. That’s partly due to an insurance scam in the state that has tied up insurers in frivolous, expensive litigation, which the state government enacted legislation to address. But the much larger problem — that powerful hurricanes are becoming more frequent — looms large.
With fewer coverage options, Florida homeowners are scrambling to find affordable policies. The state-backed Citizens Property Insurance, ostensibly a last-resort option, is now Florida’s largest home insurer, stressing the company’s solvency. Some Floridians have taken the much riskier route of going without insurance, setting up the local economy for serious pain the next time a powerful storm hits.
And it’s not just Florida. In California, worsening wildfires have also driven insurers from the state or forced them to scale back policies. Residents of Washington, Montana and Colorado are watching their coverage options shrink, too.