The rise in intense storms that cause catastrophic property damage could make several parts of the U.S. uninsurable as home values far exceed what insurance companies can offer and remain solvent, Axios reported Thursday.
For millions of Americans, living near the coast come at price, and soon that price may be uninsurable. Many of the most densely populated areas of the country are subject to occasional but intense wildfires and hurricanes. These natural disasters have caused home insurance rates skyrocket and, in some cases, make properties uninsurable.
The four fires decimating parts of Los Angeles County this week have put the spotlight on how the city can possibly recover from such monumental damage. Preliminary estimates have already put the damage and economic losses at a minimum of $50 billion.
Many of the neighborhoods most affected by the fires had their converage dropped last summer. CBS News reported that nearly to 1,600 policies in Pacific Palisades were dropped by State Farm in July and more than 2,000 were dropped by the company in zip codes that include the Brentwood, Calabasas, Hidden Hills, and Monte Nido neighborhoods.
It's not just California and Florida homeowners that may find their home without coverage. Nonrenewals have risen along the Gulf Coast, through Alabama and Mississippi; up the Atlantic seaboard, through the Carolinas, Virginia. and into southern New England; inland, to parts of the plains and Intermountain West; and as far as Hawaii.
The New York Times spoke to a homeowner in Silver City, New Mexico last month, which is located in fire-prone hills. Despite following all the necessary protocol of trimming trees and using gravel to line his property, his insurance company cancelled his policy.
"Property is located in a brushfire or wildfire area that no longer meets Homesite's minimum standard for wildfire risk," the letter from Homesite Insurance read. Since 2018, more than 1.9 million home insurance contracts nationwide have been dropped.
Sen. Sheldon Whitehouse, D-R.I., Senate Budget Committee chair, told The New York Times that property insurance could be the new canary in the coal mine for the next economic crash.
"The climate crisis that is coming our way is not just about polar bears, and it's not just about green jobs," Whitehouse said Wednesday during a hearing on the investigation's findings. "It actually is coming through your mail slot, in the form of insurance cancellations, insurance nonrenewals and dramatic increases in insurance costs."
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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