California, Florida, and Louisiana homeowners are finding it nearly impossible to find an insurance company that will cover their property.
Most mortgage lenders mandate that homeowners maintain insurance. Millions of Americans might have to reconsider their living situations without available coverage. Consumer advocates argue that property insurers are leading much-needed discussions about development in disaster-prone areas rather than governments.
Doug Heller, director of insurance with the Consumer Federation of America, a research and advocacy nonprofit, said, “Insurance companies have basically become our land-use officials,” reports a US-based news portal.
As the crisis intensifies, state leaders urgently attempt to persuade insurance companies to remain in the market.
Read more: US Senate panel discuss climate as a cause of rising insurance premiums
States are granting insurers more leeway to increase premiums or exclude certain homes from coverage, expediting rate revisions, and tightening regulations to make it more difficult for residents to sue their insurance providers.
Industry leaders point out that insurance companies have been hit hard by substantial payouts. Federal data indicates that 28 separate natural disasters in the US last year, each caused at least $1 billion in damage. They assert that they simply cannot afford to provide coverage in the highest-risk areas.
Adam Shores, senior vice president of state government relations with the American Property Casualty Insurance Association, an industry group, said, “We’re experiencing record-breaking losses related to natural disasters. We want to be there, but when the math doesn’t work for a company, they have to make those decisions.”
