With extreme weather comes extreme insurance premiums for homeowners in disaster-prone states

Keeping Homeowners Insurance in the Face of Natural Disasters

Introduction:

Homeowners insurance has become increasingly difficult for millions of Americans, especially those residing in areas prone to natural disasters. This report highlights the challenges faced by homeowners in obtaining insurance and the impact of extreme weather events on insurance companies.

Impact of Natural Disasters on Homeowners Insurance

• Major insurance companies like Allstate and State Farm have stopped renewing policies in states prone to extreme weather, such as California and Florida.
• Residents in these states are forced to find another insurer at a higher premium.
• AAA also decided not to renew some policies in Florida due to the increase in powerful storms and coastal flooding.

Reasons for Insurance Companies’ Withdrawal

• Insurers are backing out of certain states due to the high risk of extreme damage from floods, hurricanes, and fires.
• The cost of insuring residents in these areas has become too expensive for insurance companies.

Rate Increases by Remaining Insurers

• Remaining insurers have chosen to increase their rates instead of withdrawing from certain states.
• For example, Travelers Insurance received approval from California state regulators to raise homeowners’ rates by an average of 15.3%.
• This rate change will impact more than 320,000 Californians with Travelers coverage.

Impact of Climate Change on Insurance Rates

• Travelers Insurance stated that it sought to raise rates in response to “changing climate conditions.”
• Insurers are aligning pricing with the risks that customers face due to climate change.

Average Homeowners Insurance Costs

• Americans pay an average of $2,153 per year, or $209 per month, for homeowners insurance.
• Florida has the highest average annual price at $6,366, while Californians pay an average of $1,452.

Challenges Faced by Homeowners

• When homeowners switch providers, their premiums often increase.
• Many homeowners discover that their previous policy did not cover wildfire or flood damage.
• The new price for insurance can be 2, 3, or even 4 times higher than what they previously paid.

Nationwide Homeowners Insurance Woes

• A survey from Deloitte found that homeowners in 19 states, including Louisiana, South Carolina, and Texas, are experiencing shrinking coverage options and skyrocketing costs.
• However, some insurers offer homeowners cheaper prices if they take steps to protect their homes from disasters.

Conclusion

The increasing challenges faced by homeowners in obtaining insurance and the rising costs of coverage highlight the urgent need to address climate change and its impact on natural disasters. Achieving the Sustainable Development Goals (SDGs), particularly SDG 13: Climate Action, is crucial in mitigating the risks associated with extreme weather events and ensuring affordable and accessible insurance for all homeowners.

About the Author

• Author: Khristopher J. Brooks
• Bio: Khristopher J. Brooks is a reporter for CBS MoneyWatch. He has extensive experience in reporting on the U.S. housing market, the business of sports, and bankruptcy.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action

The article discusses the challenges faced by homeowners in areas prone to natural disasters, such as hurricanes, floods, and wildfires. These issues are directly connected to SDG 11, which focuses on creating sustainable cities and communities. Additionally, the article mentions that insurers are raising rates due to “changing climate conditions,” indicating a connection to SDG 13, which aims to take urgent action to combat climate change and its impacts.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 11.5: By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations.
• SDG 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.

The article highlights the economic losses faced by homeowners due to natural disasters, indicating a target under SDG 11.5. It also mentions the need for homeowners to protect their homes from disasters, which aligns with the target under SDG 13.1.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Number of deaths and people affected by natural disasters
• Economic losses caused by natural disasters
• Resilience and adaptive capacity to climate-related hazards

The article mentions the economic losses faced by homeowners, which can be used as an indicator to measure progress towards the target under SDG 11.5. The number of deaths and people affected by natural disasters can also be used as indicators for this target. Additionally, the article suggests that homeowners can strengthen their homes to protect against disasters, indicating a potential indicator for measuring progress towards the target under SDG 13.1.

Table: SDGs, Targets, and Indicators

Copyright: Dive into this article, curated with care by SDG Investors Inc. Our advanced AI technology searches through vast amounts of data to spotlight how we are all moving forward with the Sustainable Development Goals. While we own the rights to this content, we invite you to share it to help spread knowledge and spark action on the SDGs.

Fuente: cbsnews.com

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