By Ella Nilsen and Krystina Shveda | CNN
Millions of American homeowners could see insurance rates surge in the coming years in part due to worsening climate disasters, new data shows.
An analysis of from nonprofit research group First Street Foundation found nearly 39 million homes and commercial properties – about 27% of properties in the Lower 48 – are at risk of their premiums spiking as insurers struggle to cover the increasing cost of rebuilding after disasters.
It’s another alarming sign for the future of America’s homeowners’ insurance market. In the last few years, major insurers have pulled out of or stopped writing new policies in California, Florida and Louisiana – in part citing increased climate risks like more destructive wildfires and stronger hurricanes.
But while insurance prices have already surged in those states, First Street found it’s still growing in other places we think of as less risky.
“This is not just isolated to particular areas of the country, but also will impact other areas that we traditionally might not think of,” said David Jones, the former California insurance commissioner and director of the Climate Risk Initiative at UC Berkeley’s Center for Law, Energy and the Environment, who was not involved in the analysis.
The insurance industry is only just beginning to price the cost of climate change into its premiums, said Jeremy Porter, the head of climate implications at First Street and one of the report’s lead authors.
“We’re still kind of at the forefront of the insurance industry pricing in climate risk into the real estate market,” Porter told CNN. “The insurance companies are going to continue to respond to the increasing climate damages.”
For homeowners, this also means fewer choices between companies as private insurers pull out of high-risk areas or restrict coverage.
Nearly 7 million properties, almost 1 in 20 buildings, have already experienced price surges or have been dropped…
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