The Insurance Industry Is on the Wrong Side of the Legal Battle Against Fossil Fuels

The US Supreme Court opens its new term on October 5 with oral arguments in Suncor v. Boulder—the most consequential climate case it has heard to date. The fossil fuel defendants are trying to block local governments from suing them for climate deception and harm. In an alarming display of corporate allegiance, the nation’s largest property insurance associations have sided with the oil companies seeking to avoid responsibility for climate losses, over the public entities and policyholders footing the growing bill.

In recent years, insurers have pointed to growing climate risk as the reason for raising rates and dropping coverage. Now, they’re supporting the very industry driving that risk rather than the communities facing it. Why?

Suncor v. Boulder and the Demand for Fossil Fuel Accountability

From establishing cooling centers and flood protection plans to equipping firefighters and emergency responders, communities are shouldering the mounting costs of climate change. The burden is both untenable and unfair. That’s why a growing number of states and local governments have turned to courts to make fossil fuel companies pay their share for driving the climate crisis.

Fossil-fueled climate destruction threatens human life, health, the economy, and vital ecosystems on which all depend. That reality should incentivize insurers to break free from fossil fuels faster and protect the public from climate peril.

Of the nearly three dozen such suits pending across the US, Suncor v. Boulder is the first to reach the Supreme Court.

The case, brought by the city and county of Boulder, alleges Suncor and ExxonMobil knowingly contributed to climate change for decades by producing fossil fuels while deceiving the public about their dangers. Boulder argues the companies should be on the hook for the resulting climate harms and the rising costs of adapting to a warming world.

Rather than address the legal claims on their merits, the fossil fuel defendants have instead sought to get the case thrown out. They are urging the Supreme Court to bar Boulder’s suit on the grounds that it aims to regulate greenhouse gas emissions, something they claim only federal law can do. But as the plaintiffs and dozens of supporters explain, Boulder is seeking to recoup the costs of local harm and to hold the fossil fuel defendants accountable for misleading consumers, not pollution controls.

If the court rules for the defendants, it could close the door not just on this suit but others like it nationwide—leaving the public and local governments, rather than the companies that caused the harm, to keep covering the costs.

Who’s Backing the Fossil Fuel Defendants?

Nearly 70 friend-of-the-court briefs were filed in the case—many, like the Center for International Environmental Law’s, supporting the plaintiffs. Others, however, came in on the side of the fossil fuel industry. Among the 38 briefs backing Suncor and ExxonMobil, Consumer Watchdog found that 25 of them have documented financial ties to fossil fuel companies or the dark-money networks behind decades of climate denial.

Three major US insurance trade associations—the American Property Casualty Insurance Association (APCIA), the Complex Insurance Claims Litigation Association, and the Reinsurance Association of America—also submitted a brief in support of the defendants. These trade groups weren’t part of Consumer Watchdog’s analysis. But insurers, including members of these very associations, have their own story to tell of financial entanglement with the fossil fuel industry.

Betting on the Problem

Like others helping the fossil fuel industry dodge accountability, the insurance sector has well-documented financial ties to oil and gas companies. Property and casualty insurers hold a growing financial stake in fossil fuels—the same products causing the climate losses that are driving insurers to hike premiums and withdraw coverage.

As of 2023, the US property and casualty insurance industry held $84.6 billion in fossil fuel investments. The share of insurers’ portfolios tied up in fossil fuels climbed from 3.8% in 2014 to 4.4% by 2023.

Every premium dollar that flows into those investments comes from policyholders, many of whom are already struggling to afford coverage in fire- and flood-prone areas. While warning it can no longer absorb climate risk, the insurance industry is betting on the very companies creating that risk.

The Real Insurability Crisis

In their published brief in support of the Suncor defendants, the insurance associations argue that allowing state tort claims like Boulder’s could make it harder for fossil fuel companies to get liability insurance—potentially creating uncertainty and instability in the insurance market.

But they ignore the actual uncertainty and instability facing tens of millions of homeowners and tenants in the US who are bearing the brunt of climate losses and a deepening insurance crisis. In 2025, the US saw more than 23 billion-dollar weather events. The country racked up the lion’s share of global insured losses last year from what the industry continues to call “natural catastrophes,” which include climate-intensified events.

Citing climate risk, insurers are raising rates, dropping policies, and widening the climate protection gap. Home insurance premiums in the US grew by almost 50% between 2020 and 2024—more than double the rate of inflation. And since 2018, insurers have dropped more than 1.9 million home insurance contracts nationwide, contributing to a rising number of uninsured homes.

Yet the insurance industry opposes efforts to make the fossil fuel companies responsible for rising climate risk pay their fair share for resulting climate harm. If insurers are sounding the alarm, it should be about the reality of climate change, not the prospect of climate accountability.

What Are Insurers Afraid of?

It’s no wonder fossil fuel companies are seeking to stay out of court. The facts are not on their side—and neither is the law. Why, then, are the insurers?

Make no mistake, real climate accountability would be destabilizing for the fossil fuel industry. But climate change is already more destabilizing—for everyone. The inevitable and transient upheaval that will come from holding polluters responsible for the harm they have caused will be far less destabilizing than the predicted and irreparable impacts of unchecked climate change.

Fossil-fueled climate destruction threatens human life, health, the economy, and vital ecosystems on which all depend. That reality should incentivize insurers to break free from fossil fuels faster and protect the public from climate peril, rather than insulate polluters from the climate costs they have knowingly unleashed.

The message to the insurance industry is clear: Insure our collective future and make fossil fuels a thing of the past.