Some new structures stood while some older buildings were splintered after Hurricane Idalia hit Horseshoe Beach, Florida on Wednesday, August 30, 2023. (Al Diaz / Miami Herald)

USA - Home insurers cut natural disasters from policies as climate risks grow

In the aftermath of extreme weather events, major insurers are increasingly no longer offering coverage that homeowners in areas vulnerable to those disasters need most.

At least five large U.S. property insurers - including Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway - have told regulators that extreme weather patterns caused by climate change have led them to stop writing coverages in some regions, exclude protections from various weather events and raise monthly premiums and deductibles.

Major insurers say they will cut out damage caused by hurricanes, wind and hail from policies underwriting property along coastlines and in wildfire country, according to a voluntary survey conducted by the National Association of Insurance Commissioners, a group of state officials that regulates rates and policy forms.

Insurance providers are also more willing to drop existing policies in some locales as they become more vulnerable to natural disasters. Most home insurance coverages are annual terms, so providers are not bound to them for more than one year.

That means individuals and families in places once considered safe from natural catastrophes could lose crucial insurance protections while their natural disaster exposure expands or intensifies as global temperatures rise.


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“The same risks that are making insurance more important are making it harder to get,” Carolyn Kousky, associate vice president at the Environmental Defense Fund and nonresident scholar at the Insurance Information Institute, told The Washington Post.

The companies mentioned those policy changes as part of previously unreported responses to the regulatory group’s survey. The survey was distributed in 2022 by 15 states and received responses - some sent as recently as last month - from companies covering 80 percent of the U.S. insurance market.

Allstate said its climate risk mitigation strategy would include “limiting new [auto and property] business . . . in areas most exposed to hurricanes” and “implementing tropical cyclone and/or wind/hail deductibles or exclusions where appropriate.”

Nationwide has already pulled back in certain areas. The company said that in 2020, it “reduced exposure levels in some of the highest hazard wildland urban interface areas in California.”

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