With at least two dozen disasters in the United States, more than $1 billion in losses, and record-breaking heat expected, a Congressional committee on Monday warned how fossil fuels are contributing to the climate emergency. released a report detailing how the country poses a “significant threat” to the United States. The country’s housing and insurance markets.
The Joint Economic Committee (JEC) Democratic Party report states: “Climate-exacerbated disasters such as wildfires, hurricanes, floods, droughts and excessive heat are increasing the risk and are damaging homes across the country. ”. “Roughly 70% of Americans reported experiencing extreme weather in their area last year.”
“In the 1980s, the United States experienced an average $1 billion disaster (adjusted for inflation) every four months; today these major disasters occur approximately every three weeks,” the document continues. . “2023 was the worst year for home insurers since 2000, with losses reaching $15.2 billion, more than double the losses reported in 2022.”
“Rising premiums and uninsured issues could cause serious disruption to the housing market and stress state-run insurance programs, public services, and disaster relief.”
The insurance industry has already begun to respond to the stress. The publication notes that “insurance companies are pulling out of some states with high wildfire and hurricane risks, including California, Arizona, Florida, and North Carolina, leaving some areas ‘uninsurable.'” “In many areas, homeowners are not covered even if they are able to obtain insurance.” In insurance, that insurance covers less than the actual physical climate risks their homes face (e.g. rising sea levels or more intense wildfires), leaving them “underinsured.” ”
JEC Democratic Party staff found that “average homeowner insurance rates in the U.S. rose more than 11%” last year and jumped 44% from 2011 to 2021. The researchers also recorded state-by-state increases from 2020 to 2023. Florida had the highest increase ($1,272), followed by Louisiana ($986), District of Columbia ($971), Colorado ($892), Massachusetts ($855), and Nebraska ($849). It became.
The highest premiums for 2023 were Florida ($3,547), Nebraska ($3,055), Oklahoma ($2,990), Massachusetts ($2,980), Colorado ($2,972), and Hawaii ( Washington, DC ($2,867), Louisana ($2,793), and Rhode Island. ($2,792), Mississippi ($2,787).
The report attributes rising insurance premiums to “soaring” repair prices, reinsurance companies also raising rates, insurance litigation problems, and rate caps in some states that push rising costs to states where the industry is less regulated. It is associated with things. As Common Dreams reported last week, while the JEC Democrats were focused on the United States, the threat of climate change to the insurance industry is a global issue.
New report warns: “Rising premiums and uninsured issues could cause serious disruption to housing markets and stress state-run insurance programs, public services, and disaster relief.” I am doing it. “Given this growing threat, innovations in climate change mitigation and adaptation, insurance options, and disaster relief are essential to protecting Americans and their finances.”
The publication notes that “previous JEC reports on the financial risks of climate change have focused on parametric insurance (supplemental insurance plans that can quickly pay out to homeowners), community-based insurance plans that encourage local-level resilience efforts, and Catastrophe insurance and leveraging risk pooling, data and AI to improve price risk.”
The new document also promotes the Wildfire Insurance Coverage Research Act, introduced by JEC Chair Sen. Martin Heinrich (D.M.), which would “address these data needs and improve wildfire risk, insurance , to study mitigation strategies and help Americans make more informed decisions about wildfires.” The Shelter Act “creates a new tax credit that allows taxpayers to deduct 25% of their disaster mitigation expenditures.”
The report also recommends improvements to several Federal Emergency Management Agency (FEMA) programs, including:
To meet growing demand, we are increasing the amount of flagship pre-hazard mitigation grant funding available through FEMA’s Building Resilient Infrastructure and Communities (BRIC) program, exceeding the approximately $3 billion received in the Bipartisan Infrastructure Act (BIL). (Only 22 states received funding in FY23. Applications were received from all 50 locations. FEMA grants funds to disaster-hit states.) The Biden-Harris administration recently streamlined the application process for this program. similar to a commission) to provide data-based recommendations to increase community resilience to disasters and expand regional wildfire protection programs created by the BIL.
The JEC publication says the country is running an election campaign backed by billionaires and fossil fuel executives, pledging to “drill, baby, drill” to increase pollution from global warming, as scientists say. It was published as President-elect Donald Trump prepares to take office next month. Alert about the need to reduce emissions. Republicans will also gain control of both chambers of Congress.
“Republicans have been denying that climate change is real for more than 40 years, and as a result, homeowners are seeing their insurance premiums go up,” Heinrich said Monday, calling the Republican Party’s record on climate change a reality. criticized.
He cited data from 2020 to 2023 and added, “New Mexico homeowners saw their insurance premiums increase by $400 over the past three years because Republicans refused to act.” “The longer climate change deniers keep up this facade, the more expensive things will become.”
