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Yesterday, as Greece, Turkey, Bulgaria, and Hong Kong suffered deadly, record-shattering flooding, Hurricane Lee exploded into a ferocious Category 5 storm in the Atlantic, the United Kingdom hit its most extreme September heatwave, and a broiling Texas declared a power emergency, the United States Senate Committee on Banking, Housing, and Urban Affairs held a hearing titled “Perspectives on the Property Insurance Market and the Impact on Consumers.”
In his opening statement, Committee Chair Sherrod Brown (D-Ohio) called buying a home “essentially an act of optimism,” before detailing the stress of home ownership and the comfort insurance is supposed to provide. Insurers “have abandoned entire markets” as climate risk has grown everywhere, with floods, fires, and storms just this summer killing hundreds and causing billions of dollars in damage. “Now there’s no place to hide from these disasters.”
Brown noted this means state-backed “insurers of last resort” have grown rapidly; in Florida the insurer of last resort is now the largest in the state.
As Consumer Federation of America’s Doug Heller outlined in his testimony, home insurance is an essential product “akin to a utility.”
But climate pollution is quickly driving up the cost of insurance for many consumers, and the insurance company retreat from many markets is also making insurance less widely available. Since mortgage lenders require some form of property insurance, the shrinking availability of insurance is contributing to the already high cost of housing. Heller noted that this trend was especially sharp in Midwestern states that are sometimes mischaracterized as less vulnerable to climate disasters.
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