By Nina Atimah
- The severity and frequency of climate-related disasters—13 so far in 2024 are leading to skyrocketing insurance claims
- The global impact of climate change is projected to cost the world over $1T annually by 2030
Climate change is causing insurance premiums to soar, leaving many homeowners struggling to keep up. The rising frequency and severity of extreme weather events is causing many insurers to withdraw from high-risk markets altogether. In fact, some areas are becoming effectively ‘uninsurable’. In 2024 alone, the U.S. experienced 24 of these billion-dollar disasters, including hurricanes Beryl, Helene, and Milton. These events are unfortunately part of a troubling trend; 2023 saw a record 28 billion-dollar disasters, with total costs reaching $165 billion.
Why This Matters: As extreme weather events increase, the financial burden is hitting vulnerable communities the hardest. And it’s not just here where the numbers are racking up. Nearly half of Black Americans reside in states like Florida and Louisiana, where hurricanes and flooding strike with growing intensity. Insurers retreating from these regions has left many families unable to afford coverage, compounding economic vulnerabilities and perpetuating systemic inequities.
In response to the rising costs, insurers are worried about profitability. They are raising premiums (34% in the last 6 years), capping payouts, or exiting high-risk markets altogether leaving millions of homeowners scrambling for alternatives. Some states are stepping in and implementing public insurance programs to fill the gaps left by private companies, but these solutions often struggle with sustainability and funding. But all is not lost. Community organizations are also stepping up. They’re training residents in emergency response and advocating for equitable disaster policies.
What’s Next: Moving forward, unpredictable and more frequent weather disruptions are becoming the norm. It’s crucial to counter the consequences with improved forecasting especially leveraging AI and for communities to engage on the topic at all levels and advocating for systemic changes in the insurance industry.
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