The Reliance School

400 Words / 2 min. Read

As the effects of climate change worsen, property insurance is becoming a canary in the coalmine for the most risk-prone areas of the country.¹ Without insurance, it can be difficult (if not impossible) for areas to recover and rebuild following environmental catastrophes. As such, property insurance can directly affect the long-term viability of a region, which in turn becomes a driver of climate migration.

With all this in mind, we wanted to create a resource to track how climate change and natural disasters are affecting people's ability to insure their homes. To start, we're created a map of average property insurance rates by state;² while this isn't a direct representation of climate threats, it provides a broad picture of risk as it relates to property values and insurance claims.

‍(You can hover your mouse over each state to see the values; you can tap if you're on a phone, but it's easier with a laptop or tablet.)

As insurance companies adjust their risk models to account for climate change, premiums have risen an average of 21% across the nation.¹ This map shows approximate rate increases for property insurance since 2015.

FEMA has also updated their risk models, leading to increases in flood insurance premiums across the country.³ This map shows rate increases under the new risk methodology.

In some cases, major insurance companies have begun withdrawing coverage entirely. Allstate, Farmers, and State Farm have ended contracts in California and Florida,⁴ and as climate risks increase, more providers are likely to follow.⁵ In a survey conducted by the National Association of Insurance Commissioner, at least five large U.S. property insurers (including Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway) have told regulators that extreme weather patterns caused by climate change have led them to exclude protections from weather events and stop writing coverages in some areas.⁶

In the map below, we're tracking the number of major insurance providers⁷ that have withdrawn coverage from US states.

In the following sections we've listed insurance providers that have withdrawn coverage by state, along with our sources for this data. We’ll continue to update this page as more news emerges.

California

1. AIG⁸
2. Allstate⁹
3. Farmers¹⁰
4. State Farm¹¹
5. USAA¹²

Chubb has withdrawn coverage for multi-million dollar homes.¹³

Colorado

Homeowners in wildfire-prone regions have had trouble renewing their policies,¹⁴ but national insurers have not yet withdrawn from the state.

Florida

1. Farmers¹⁵
2. Progressive¹⁶

Additionally, over 15 small insurers have undergone liquidation.¹⁷

Iowa

Large reinsurers have pulled out of Iowa following flood and wind damage from a derecho in 2020.¹⁸

Louisiana

• AIG¹⁹

Over 20 small insurance providers have become insolvent or submitted withdrawal notices.¹⁹

North Carolina

• Farmers²⁰

Nationwide has pulled out of high-risk coastal areas.²¹

Virginia

Nationwide has pulled out of high-risk coastal areas.²²

Footnotes & References

1. How climate change could cause a home insurance meltdown (Michael Copley, Rebecca Hersher, Nathan Rott, NPR)
2. Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner’s Insurance Report (NAIC)
3. Risk Rating 2.0: Equity in Action (FEMA)
4. ‍Why California and Florida Have Become Almost Uninsurable (Peter Coy, The New York Times)
5. Is the World Headed for an Uninsurable Future? (Emmy Hawker, ESG Investor)
6. Home insurers cut natural disasters from policies as climate risks grow (Jacob Bogage, The Washington Post)
7. ‍Top 100 U.S. Property & Casualty Insurance Companies (Reinsurance News)
8. AIG to exit California homeowners insurance market at January-end (Jason Woleben, S&P Global)
9. Yet another home insurance giant quietly stops writing new policies in California (Claire Hao, San Francisco Chronicle)
10. Farmers, California’s second-largest insurer, limits new home insurance policies (Sam Dean, Los Angeles Times)
11. California New Business Update (State Farm)
12. Insurance Crisis: Another Major Home Insurer To Limit Business in California (Matthew Kupfer, The San Francisco Standard)
13. Chubb pulling back sharply in California; CEO blames price inadequacy (Tom Jacobs, S&P Global)
14. ‍Homeowners in Boulder’s mountain communities struggle to find insurance after devastating wildfires (Tim Drugan, Boulder Reporting Lab)
15. Farmers pulls out of Florida property insurance despite efforts to stabilize the market (Brendan Farrington, Associated Press)
16. Progressive dropping coverage for 56,000 Florida homes (Lyle Adriano, Insurance Business)
17. Farmers Insurance is the 4th major insurer to leave Florida, underlining insurance crisis (Brandon Girod, Pensacola News Journal)
18. Natural disasters threaten small insurers, leaving Iowans with high premiums and fewer choices (Tyler Jett, Des Moines Register)
19. Here are the Louisiana insurers that have gone broke or left the state amid deepening crisis (Michael Finch II, NOLA)
20. Farmers Insurance to Pull out of North Carolina Homeowners’ Market (Brian Kern, Insurance Journal)
21. Agents, Insureds Said Surprised by Nationwide’s 10,000 Nonrenewals in NC (William Rabb, Insurance Journal)
22. After insurer departures, 70,000 Virginians will not be able to purchase health coverage in 2018 (Luanna Rife, The Roanoke Times)