Insurers Limit Coverage in Response to Climate Change-Driven Extreme Weather

Insurers are reducing coverage in areas vulnerable to extreme weather events due to climate change, leaving homeowners at risk. Major insurance providers, including Allstate, American Family, Nationwide, Erie Insurance Group, and Berkshire Hathaway, have reported to regulators that they are changing their policies to exclude protections from weather events such as hurricanes, wind, and hail in high-risk regions. These changes are in response to the increasing frequency and intensity of natural disasters caused by climate change. The National Association of Insurance Commissioners conducted a survey, in which insurers stated that they would limit coverage for properties along coastlines and in wildfire-prone areas. As homes in once safe areas become more exposed or susceptible to natural disasters, insurance providers are more likely to drop existing policies. The rising costs of claims resulting from climate-related disasters have also led insurers to increase premiums and deductibles. Overall, the changes highlight the significant challenges homeowners face in obtaining insurance protections as extreme weather events become more frequent and severe.