Volts Climate change and insurance: a growing fustercluck
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Dec 4, 2024 Kate Gordon, CEO of California Forward and a clean energy veteran, dives into the pressing crisis facing the insurance industry due to climate change. She discusses why insurers are abandoning high-risk areas and the dire consequences for communities. The conversation highlights the challenge of inadequate coverage and potential municipal bankruptcies, stressing the need for innovative solutions and proactive policies. Gordon also touches on the importance of transparency in insurance models and fostering resilience amidst rising climate risks.
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National Insurance Impacts
- Climate change impacts insurance nationwide, not just in coastal states.
- Midwest insurers face increasing hail claims, and water damage is a major issue across the board.
NFIP Subsidizing Risk?
- The National Flood Insurance Program (NFIP), covering 97% of national flood insurance, is criticized for subsidizing risky development.
- Low rates encourage building in floodplains, benefiting wealthy homeowners while potentially harming low-income communities if rates increase.
Overlooking Property Resilience
- Insurance rates rarely reflect property-level resilience efforts.
- Insurers often use broad assessments, neglecting community-scale resilience, which could significantly mitigate risks.