Washington (AFP) – Homeowners in areas of the United States with the highest climate-related risks saw declining access to insurance, a Treasury Department report released Thursday said. Average insurance non-renewal rates were about 80 percent higher for consumers in high-climate-risk areas than for those in the lowest-risk ones, the report found. It showed that “homeowners insurance is becoming more costly and harder to procure for millions of Americans as the costs of climate-related events pose growing challenges,” the department said.
The report, providing a view of the homeowners insurance market, comes as a climate-related crisis unfolds in Los Angeles, and with millions across the country rebuilding from the effects of hurricanes and other disasters last year. Los Angeles has been battling deadly wildfires that have killed at least 24, destroyed thousands of buildings, and forced tens of thousands to flee their homes.
The “analysis comes at a time of devastating tragedy, loss of life, and destruction from the wildfires in the Los Angeles area,” said Treasury Secretary Janet Yellen in a statement. “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 US economy,” she added.
The report, released by the Treasury Department’s Federal Insurance Office, is based on data covering more than 330 insurers on over 246 million homeowners insurance policies, running from 2018 to 2022. Homeowners living in communities hit by “substantial weather events are paying far more than those elsewhere,” the Treasury said.
Across the country, homeowners insurance costs have been rising — with average premiums per policy growing 8.7 percent faster than the rate of inflation in the 2018-2022 period. “Data and analysis, like those in this report, are critical for helping policymakers understand how substantial climate-related property losses are being spread across homeowners, insurers, and governments,” said Under Secretary of Domestic Finance Nellie Liang.
© 2024 AFP
