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Climate change is making it more difficult for Americans to get home insurance


If you just bought a house or you tried to, then you already know this. It's increasingly difficult for many Americans to get home insurance, and climate change is a big reason why. Major insurance companies have stopped offering home insurance in some parts of the country. And the cost is rising nationwide, which means it will be harder for people to get mortgages or to fix their homes after disasters. NPR's Rebecca Hersher sat down with our co-host Michel Martin to explain why.


Rebecca, good morning. Thanks for joining us.

REBECCA HERSHER, BYLINE: Yeah, thanks for having me.

MARTIN: So some insurance companies have cancelled home insurance policies in California this summer. But you found that the problems with home insurance go beyond that. Say more?

HERSHER: Yeah. So we really found that the options for buying home insurance are shrinking in a lot of places and insurance is getting more expensive. So just to give you a sense - as you mentioned, multiple major insurance companies are pulling back from California. That means they're not renewing existing home insurance policies or they're not offering new policies. But that's also happening in Louisiana.

In Florida, in just the past few weeks, two big companies have pulled back from that state. And even more broadly, prices are just going up, and up, and up. So overall, the cost of home insurance in the U.S. has risen about 20% since 2015. In Colorado and Texas, prices are up more than 40%. In Florida, it's risen nearly 60%. So these are some of the hot spots that we're seeing for this growing home insurance crisis.

MARTIN: All right. So you've told us Florida, Louisiana, Colorado, Texas, California - what you've called, you know, hot spots. What is making these particular places hard to insure?

HERSHER: Well, they're all vulnerable to climate-driven disasters - right? - like more intense wildfires and hurricanes. And the last few years have been particularly hard. You know, these states have suffered hundreds of billions, with a B, of dollars in losses from disasters. And a lot of that cost of rebuilding ultimately falls on insurance companies. And we're actually seeing smaller insurance companies go bankrupt after storms. And bigger companies are deciding, basically, you know, the risk is just too high for us to keep doing business this way.

MARTIN: Where is this headed?

HERSHER: Well, you know, climate change is only getting worse. And that makes climate experts that we're talking to more and more concerned about the future of home insurance in the U.S. This is how George Hosfield put it. He's the lead insurance analyst at LexisNexis Risk Solutions.

GEORGE HOSFIELD: Those houses that are on the coast, those houses that are in the hills of California or Colorado, there could end up being places that become just financially impractical to have insurance coverage.

HERSHER: And that is a huge deal. You know, if you can't get insurance, you can't get a mortgage. Families that don't have adequate home insurance really struggle after disasters. There are studies about this. You can be forced to move if you can't pay to repair your house. And it can damage your long-term finances. And on top of that, insurance, it's a really big part of the larger economy. So there are worries that this could eventually trigger a housing crisis that could lead to an economic meltdown.

MARTIN: This just seems really big. So is there a solution to this that people are talking about that is within sight?

HERSHER: So one solution - and you'll have to bear with me because it's not popular, but from the point of view of insurance companies, it's to make insurance more expensive. But it's not as simple as companies just deciding to raise prices all on their own. You know, in most places, insurance companies have to get permission from state regulators to raise their prices. And regulators, they're trying to keep rates low for consumers. So one issue in that kind of pull and tug between insurers and regulators is that insurers want to take future climate risks into account when they set their prices. But they haven't figured out how to do that with regulators.

MARTIN: Well, you've just sort of told us. Look, more expensive insurance is not going to sound very appealing to a lot of people. What else is on the table?

HERSHER: There are other solutions, but honestly, nothing super popular. A big one that insurers and state governments agree on is making homes more resilient, so things like requiring roofs that can withstand hurricane-force winds or using building materials that are fire resistant. But of course, the most potent solution, the biggest one of all, it's to stop releasing greenhouse gases into the atmosphere. You know, if humans stop burning fossil fuels, it will help control extreme weather. If humans don't stop releasing greenhouse gases, the risks will just keep growing and growing.

MARTIN: That's Rebecca Hersher from NPR's climate desk. Rebecca, thanks so much for joining us.

HERSHER: Yeah. You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Rebecca Hersher (she/her) is a reporter on NPR's Science Desk, where she reports on outbreaks, natural disasters, and environmental and health research. Since coming to NPR in 2011, she has covered the Ebola outbreak in West Africa, embedded with the Afghan army after the American combat mission ended, and reported on floods and hurricanes in the U.S. She's also reported on research about puppies. Before her work on the Science Desk, she was a producer for NPR's Weekend All Things Considered in Los Angeles.
Michel Martin is the weekend host of All Things Considered, where she draws on her deep reporting and interviewing experience to dig in to the week's news. Outside the studio, she has also hosted "Michel Martin: Going There," an ambitious live event series in collaboration with Member Stations.