Broker Check

How Climate Change Affects Insurance

February 09, 2022

Climate change is affecting all of us. Some recent statistics:

  • According to the Washington Post, over 40% of Americans live in counties impacted by climate disasters in 2021. Over 80% of Americans experienced a heat wave, causing at least 656 deaths. Property damage was over $104 billion.
  • FEMA declared eight statewide climate related disasters, affecting 135 million people.
  • The Gallagher Re Natural Catastrophe Events report for 2021 estimated insured losses, excluding COVID, were $116 billion (this includes earthquakes and volcanic eruptions not linked to climate change). This is the third largest since 2011, and 63% higher than average for the last decade.

As we see more extreme weather events - hurricanes, tornadoes, drought, flood, wildfires - the cost of insuring them increases. Insurance premiums and deductibles are rising, and coverage in some states - Florida and California, for example - is harder to get. As areas that seldom saw floods or tornadoes experience them more frequently, insurers will adjust their rates and underwriting. Be prepared.