These insurers are screwing the public on climate change
Allstate, State Farm, and AIG have all pulled coverage for people in climate-vulnerable areas while continuing to invest billions each year in fossil fuels. Image source: Getty Images
While major U.S. insurers drop coverage for people vulnerable to climate change, they're also investing billions in the companies that fuel it.
by ARIELLE SAMUELSON AND EMILY ATKIN
Here’s something everyone needs to understand about climate change: In addition to being an existential threat to life on Earth, it also costs a lot of money.
Already this year, the U.S. has seen more climate disasters costing over $1 billion than ever before. The National Oceanic and Atmospheric Administration announced on Monday that the U.S. has already seen a record-breaking 23 weather disasters costing more than $1 billion in 2023, with a total cost of $57.6 billion so far.
The cost of these disasters has always fallen on individuals. But right now, we pay using a system designed to spread out those costs among the population. We pay taxes to local, state and federal governments, for example, which are then charged with covering much of the recovery cost. Those of us who own property also also pay premiums to insurance companies, which are then charged with covering some of the cost of rebuilding.
After this year’s extreme weather, however, some U.S. insurance companies no longer want to fully participate in this system.
As the Washington Post reported earlier this month, “At least five large U.S. property insurers 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.”
One could argue that these companies are acting responsibly. Clearly, these insurers understand the risks of climate change, and understand that it’s not financially viable to insure properties in climate-vulnerable areas.
But here’s our question: If these insurance companies truly understand climate risk—and if they are truly acting responsibly—why are they still underwriting and investing in fossil fuel projects, and supporting the expansion of fossil fuel production around the world?