State Farm stops offering insurance in California because of ‘rapidly growing catastrophe exposure’
The climate crisis is becoming a financial crisis.
This month, the largest homeowner insurance company in California, State Farm, announced that it would stop selling coverage to homeowners. That’s not just in wildfire zones, but everywhere in the state.
Insurance companies, tired of losing money, are raising rates, restricting coverage or pulling out of some areas altogether — making it more expensive for people to live in their homes.
“Risk has a price,” said Roy Wright, the former official in charge of insurance at the Federal Emergency Management Agency, and now head of the Insurance Institute for Business and Home Safety, a research group. “We’re just now seeing it.”
In parts of eastern Kentucky ravaged by storms last summer, the price of flood insurance is set to quadruple. In Louisiana, the top insurance official says the market is in crisis, and is offering millions of dollars in subsidies to try to draw insurers to the state.
And in much of Florida, homeowners are increasingly struggling to buy storm coverage. Most big insurers have pulled out of the state already, sending homeowners to smaller private companies that are straining to stay in business — a possible glimpse into California’s future if more big insurers leave. [Continue reading…]
Climate change is a primary driver of escalating wildfires in California, with extreme temperatures and dry air spawning more intense burning, according to a UCLA study released Tuesday.
The study, published in the International Journal of Wildland Fire, drew from state and federal firefighting data and synthesized earlier reports on climate change and wildfire. Researchers examined fires between 1980 and 2020, along with the environmental changes during those four decades.
“Climate change is an overarching factor” in more severe blazes, said study author Glen MacDonald, a UCLA professor of geography and environmental sustainability. In particular, he said, research shows a “striking” relationship between the increase in air dryness and annual area burned. [Continue reading…]