For our look at the marketplace. The private sector makes money by supplying things the public demands, but only if it can make money doing so. If it can't, then either the demand is unmet, or it is provided by the public sector.
It may well be that insurance from natural disaster - acts of God - is no longer profitable for the private sector. Now the issue becomes whether this becomes a question of whether it is provided by the public sector.
- Click here for the article.
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 who regulate 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.
“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.
