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Climate-Fueled Insurance Cost Hikes Putting American Dream 'Out of Reach'
"Policymakers across the country should see this data as a blaring warning that they can no longer ignore the alarm bells of a climate-driven financial crisis," said one advocate.
Jan 17, 2025
As communities across the Los Angeles area continued to grapple with catastrophic wildfires, the U.S. Treasury Department on Thursday released the most far-reaching report ever on the climate emergency's impact on home insurance—shedding light on how disasters like the one devastating Southern California this month could increasingly push U.S. families toward financial ruin.
More than three years after President Joe Biden issued an executive order directing the Federal Insurance Office to assess "the potential for major disruptions of private insurance coverage in regions of the country particularly vulnerable to climate change impacts," the FIO released an analysis showing that homeowner insurance costs are rapidly rising across the U.S.—8.7% faster than the rate of inflation in 2018-22.
During that period, homeowners in the 20% of ZIP codes in coastal areas and other regions vulnerable to climate disasters faced insurance premiums that averaged $2,321—82% higher than people in the ZIP codes with the lowest risk.
"Climate change is already increasing our cost of living—and it's only going to get worse," said Steven Rattner, an investor and New York Times opinion writer.
For a growing number of homeowners, rising insurance costs have led to a cost-benefit analysis that puts them at risk for financial ruin, as they have given up on keeping current with their payments.
Analyzing 246 million insurance policies issued by 330 insurers nationwide from 2018-22, the FIO found that insurers canceled at least 10% of policies in 2022 due to nonpayment. Cancellation rates were highest in hurricane-prone areas such as Hilton Head, Charleston, and Myrtle Beach, South Carolina, as well as places that are vulnerable to increasingly fast-moving wildfires like California and Arizona.
During the time period analyzed, five wildfires in the Southwest caused more than $100 million in damages, with homeowners claiming an average of $27,000.
"While insurance companies will no doubt find ways to profit from the crisis, households across the country cannot sustain rising costs indefinitely."
"Treasury's analysis comes at a time of devastating tragedy, loss of life, and destruction from the wildfires in the Los Angeles area," said Secretary of the Treasury Janet Yellen. "While it's far from clear what the exact financial costs of this disaster will be, it is a stark reminder of the impacts of the growing magnitude of natural disasters on the U.S. economy."
"This report identifies alarming trends of rising costs of insurance—to consumers and insurers themselves—as well as lack of availability of insurance, all of which threaten the long-term prosperity of American families," Yellen added.
In other words, said Carly Fabian, senior insurance policy advocate with Public Citizen's Climate Program, the climate-fueled insurance crisis is helping to push the American Dream of home ownership "out of reach" for a growing number of families.
"This report shows exactly what we feared: Climate change is creating an insurance crisis for households across the country. For many Americans, home ownership is a key part of the American Dream," said Fabian. "While insurance companies will no doubt find ways to profit from the crisis, households across the country cannot sustain rising costs indefinitely."
In 2022, Public Citizen joined more than 75 consumer advocacy and environmental justice groups in calling on the Treasury Department to promptly follow Biden's executive order and collect data on how the climate emergency is affecting homeowners.
"While this report is an essential step, it is only a first window into the data necessary to monitor this crisis," said Fabian. "The fact that the Federal Insurance Office had to be the first to propose collecting and now publishing this data shows the utter failure of the fragmented state regulatory system to protect the public. In the aftermath of the fires in Los Angeles and the devastation in Asheville [from Hurricane Helene], policymakers across the country should see this data as a blaring warning that they can no longer ignore the alarm bells of a climate-driven financial crisis."
The Los Angeles fires this month could ultimately cost as much as $275 billion, AccuWeatherreported this week, and the National Oceanic and Atmospheric Administration revealed this month that from 2018-22, 84 billion-dollar climate disasters—excluding floods, which are typically not covered by home insurance—cost more than $609 billion. The costs of such events have continued rising since 2022.
Climate reporter Kate Aronoff of The New Republic likened the burgeoning home insurance crisis to the for-profit health insurance industry, in which corporate consolidation is also pushing premiums higher and contributing to medical debt that's owed by about 20 million people.
"Everyone gets sick. Dealing with that's a nightmare even if you have good coverage," said Aronoff. "Not everyone's house will burn down or flood but [there are] some real parallels in terms of human tragedy and suffering being mediated through an infuriating for-profit bureaucracy with haphazard public backing."
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Survivors of Deadly LA Wildfires Seek Criminal Charges for 'Reckless' Big Oil
"While these deaths and injuries are unspeakably tragic, they aren't just tragedies, they're also crimes," said one attorney.
Jan 16, 2025
Victims of the deadly wildfires still devastating large swaths of Los Angeles County were joined Thursday by scientists and legal experts at a press conference demanding criminal accountability for the fossil fuel industry over its role in the climate crisis.
"The disasters we are seeing today are not natural. They are crimes," Danielle Levanas, who grew up in Pacific Palisades and whose parents' home was destroyed by the Palisades Fire, said during the press conference attended by Common Dreams. "My elementary and middle school, our rec center, our library, the local community theater, the banks, the post office where we voted, the grocery stores, our favorite restaurants—they have all been taken out."
"How do you communicate the value of your deceased mom's journal from 1981, when she was pregnant with you, or the textiles you collected when you worked in West Africa in your mid-20s, or the boxes of home videos carefully labeled and organized, but not yet digitized, that captured moments with your family you had hoped to one day share with your own kids?" she asked. "Losing that house in some ways feels like losing my mom all over again."
"The severity of these fires has escalated dramatically due to climate change and the actions of Big Oil companies that have exacerbated this crisis."
Sam James, a 24-year-old Santa Monica resident, watched the Palisades Fire rage from her window. James grew up in Altadena, where the Eaton Fire destroyed the homes of her grandfather and other relatives.
"Our roots in Altadena and Pasadena go back to at least 1890, with a legacy of building opportunities for Black generational wealth primarily through home ownership," she explained. "Much of this progress has been destroyed by recent wildfires including the Eaton Fire."
"While we always understood the risks of living in this area, the severity of these fires has escalated dramatically due to climate change and the actions of Big Oil companies that have exacerbated this crisis," James said. "Their reckless pollution and disregard for the environmental impact have directly contributed to climate change and the intensification of natural disasters like these wildfires. They must take responsibility for the harm that they've caused, pay reparations to the affected communities… and take immediate steps to mitigate further damage."
"The science is clear," she added. "We've seen the writing on the walls. Climate change is here, and it's only getting worse. Our communities cannot continue to bear the physical and emotional toll of this crisis caused by the actions of a powerful few. It's time for Big Oil to be held accountable and take real, measurable steps toward a more sustainable future."
Kristina Dahl, vice president of science at Climate Central, told reporters at the news conference that "we are up against a very deep-pocketed fossil fuel industry that has made it very difficult to address the crisis."
However, "California has held corporations accountable for their role in wildfires, and yet much of the financial burden is still falling on taxpayers and ratepayers," she added, "and the companies that are shaping the conditions under which these fires are occurring are largely let off the hook."
Wildfire evacuee Maya Golden-Krasner, the deputy director and senior attorney at the Center for Biological Diversity's Climate Law Institute, said during the press conference: "Having inflicted as much as—or maybe more than—$250 billion in damages, the LA fires already rank as one of the worst disasters in U.S. history. Yet the fossil fuel polluters who rake in massive profits and have created the conditions for the fires, the floods, and the other disasters have faced no responsibility to pay for the consequences, and that leaves the rest of us stuck with the multibillion-dollar tab."
Golden-Krasner continued:
So one of my and my organization's top priorities this legislative session is to pass a climate superfund bill. The bill is modeled on federal law that requires hazardous waste polluters to clean up their toxic messes and also on California's Childhood Lead Poisoning Prevention Act. It would make the largest fossil fuel polluters pay a portion of their huge profits to address the climate consequences they helped create and help California adapt to future disasters. Vermont and New York have actually already passed similar bills last year. And in California we're already paying for Big Oil's climate destruction not just with money but with our lives.
"That's why we need our own climate superfund bill, to put billions of dollars in climate costs back on corporate polluters where they belong," she added.
While unable to share details about which state lawmakers will sponsor it or exactly when it will be introduced, Golden-Krasner told reporters that new California climate superfund legislation is likely to be released "within the next few days."
"Please stay tuned for that," she said. "There was a bill last session that made it through three committees in 60 days and the fossil fuel industry pushed really hard against it. So we're hoping that this year folks will come out and support it and we'll be able to pass it."
Noting that "climate change didn't happen out of the blue," attorney and Public Citizen Climate Program Accountability Project director Aaron Regunberg said that "the climate effects driving these fires are the direct and foreseeable—and in fact foreseen—consequences of the actions of a small number of fossil fuel companies that knowingly generated a huge portion of all the greenhouse gasses that caused this crisis and fraudulently deceived the public about the dangerousness of their products specifically in order to block and delay the very solutions that could have avoided these catastrophes."
"What's more, they did all of this with full knowledge of just how lethal their conduct really was, having long predicted that the continued burning of their fossil fuel products would cause, in their own words, 'catastrophic' climate harms," he continued.
"We have a concept in the law for when someone consciously disregards a substantial risk of causing harm to another person," Regunberg said. "That is called recklessness. And that's what we mean when we say that, while these deaths and injuries are unspeakably tragic, they aren't just tragedies, they're also crimes."
"The victims and survivors of climate disasters deserve justice, and fortunately we have mechanisms to give it to them," he stressed. "We have new legislative frameworks like the climate superfund. We have the civil justice system, which is designed to repair harms and compensate those who have been injured."
"The victims and survivors of climate disasters deserve justice, and fortunately we have mechanisms to give it to them."
"And that's exactly what cities and states all across the country including California are seeking with their climate accountability lawsuits, which continue to move forward and just this week overcame another dismissal attempt by Big Oil at the [U.S.] Supreme Court," Regunberg said. "And we also have the criminal justice system, which is designed to protect citizens from harm and hold wrongdoers accountable."
Regunberg last year co-authored a legal memo laying out how local or state prosecutors could bring criminal charges against Big Oil for deaths from extreme heat.
"Did you know that it's a felony in California to recklessly cause a fire?" he added. "It's involuntary manslaughter to recklessly cause a death. Local prosecutors should consider whether Big Oil's conduct here amounts to violations of these kind of criminal laws."
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'Abominable': Trump and GOP Float Tying Los Angeles Wildfire Aid to Debt Ceiling
"It's outrageous that Trump and House Republicans are threatening to withhold recovery aid if their conditions aren't met," said a leader in the Working Families Party.
Jan 13, 2025
The deputy national director of the Working Families Party had sharp words for a group of House Republicans and President-elect Donald Trump, who, according to Politicoreporting published Monday, discussed tying fire relief for California to the politically charged issue of increasing the debt ceiling.
The reporting comes as California continues to battle fires in the Los Angeles area that have consumed tens of thousands of acres and left over 20 people dead. The scale of the destruction could make them, collectively, the costliest wildfire disaster in U.S. history, a climate scientist told the Los Angeles Times last week.
"The Palisades wildfires have destroyed homes, schools, and businesses and left thousands of families without a roof over their heads. It's outrageous that Trump and House Republicans are threatening to withhold recovery aid if their conditions aren't met," said Working Families Party deputy national director Joe Dinkin in a statement Monday.
"Every Republican should be on the record denouncing this abominable plan," he added.
Per Politico, nearly two dozen House Republicans attended a dinner at Trump's Mar-a-Lago Club over the weekend where the option was discussed.
Speaker Mike Johnson (R-Fla.), who was not a part of the conversation but did later confirm the conversation, must deal with the looming debt cliff, which is set to be reached sometime in mid-January, and he faces obstacles within his own party. In December, fractures appeared in the GOP when fiscal hawks refused to back legislation that Trump supported that would have raised the debt limit.
Johnson has also said he would try to lift the debt limit by including it in a reconciliation bill full of President-elect Donald Trump's legislative priorities, though this could run afoul with those same fiscal hawks. Some House Republicans reportedly brought up the pitfalls of this option during discussions at Mar-a-Lago over the weekend.
Of the potential move to link fire relief to the debt ceiling, Politico reported: "The Sunday night discussions prove Republicans are desperately looking for a plan before the nation is due to exhaust its borrowing authority—though Democrats and some Republicans are sure to balk at the prospect of linking disaster relief dollars to a politically charged exercise like extending the debt limit."
Congress recently passed a spending bill that included funding for natural disaster relief, but scope of the destruction in California has some officials wondering if more may be needed, Politico reports.
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