Severe Weather Special: Insurance swamped by increasing risks from climate change
COLUMBIA, Mo. (KMIZ)
By now you have probably heard about the gloomy future of insurance, or are dealing with it firsthand. Prices are rising as risk increases in a changing climate and insurance companies may have to change how their industry operates.
Disasters are accelerating in number and intensity, rapidly outpacing the system's capacity. Of the 403 billion-dollar disasters NOAA has recorded since 1980, over a fourth (115) occurred in just the last five years. These disasters are reaching into previously "safer" regions and introducing risk where insurers did not expect it.
The effects have rippled across the globe, but it is hard to calculate the full cost of the damage. There is no consistent network for insurance data across the United States; some states do not provide data at all.
The New York Times analyzed the most recent nationwide insurance figures and assessed where Americans have dropped their policies. The Treasury Department data shows an expansive loss of coverage between 2018 and 2022, with the steepest drops in the riskiest areas. Some high-risk communities are seeing over 5 to 10% annual losses in insurance coverage.
Disasters themselves are changing as severe storms have begun to cost just as much or more than the typical big-dollar hurricanes and wildfires. This is where the threat hits closer to home in the Midwest, where storms are getting wetter and more intense.
Precipitation on the wettest 1% of days has jumped almost 50% or more in the Upper Midwest and Northeast, where it was once considered "safer" to live to avoid the effects of climate change. But the climate is proving it affects every corner of the planet and is coming for insurance too.
