This week on Possibly, Senator Sheldon Whitehouse helps explain what options we have to address climate change’s impact on the home insurance industry.
Megan Hall: Welcome to Possibly, where we take on huge problems, like the future of our planet, and break them down into small questions with unexpected answers. I’m Megan Hall.
Journalists, researchers and politicians have been sounding the alarm in recent months about a new industry impacted by climate change: home insurance.
In the past two episodes we’ve looked in to what the problem is and how different states are approaching it.
Today, Juliana Merullo and Nat Hardy are here to talk about possible solutions.
Juliana Merullo: Hiya Megan!
Nat Hardy: Hey there!
Megan Hall: Can you remind me why people are so worried about climate change affecting home insurance?
Juliana Merullo: Sure! Basically, climate change is making global temperatures rise, which makes disasters like hurricanes, hail storms and wildfires more frequent and more severe.
Nat Hardy: That’s causing more damage to our homes and businesses, which means insurance companies are having to pay out more money in more parts of the country.
Juliana Merullo: They’re responding by raising the price of coverage, and refusing to write new policies in some areas altogether.
Nat Hardy: Experts worry that if homebuyers can’t get insurance, property values and property taxes could go down, leading to a financial crisis.
Megan Hall: I hope you have some good solutions for me!
Juliana Merullo: Well, don’t get your hopes up. The truth is, there’s no simple answer.
Nat Hardy: But there is one thing experts agree on.
Ishita Sen: There is a big gap in data, and we can only sort of come up with good solutions here if we learn exactly what the problems are.
Nat Hardy: That’s Ishita Sen. She’s an associate professor of finance at Harvard Business School.
Megan Hall: A data gap? What does that mean?
Juliana Merullo: Well there’s a couple parts to it. The Senate Budget Committee and the Treasury under President Biden both published big reports looking into the climate driven home insurance crisis.
Nat Hardy: And when they requested information from states and insurance companies about policies, not everyone responded.
Juliana Merullo: Even when researchers and policymakers do get this kind of data, it often isn’t super specific.
Nat Hardy: It might just be broken down by zip code or county, but not to individual houses.
Juliana Merullo: Ishita says we need all of the data, and specific data, to understand how different regulations and policy decisions are affecting these insurers.
Megan Hall: Ok, that doesn’t sound too hard.
Nat Hardy: Totally. But that’s only part of it.
Senator Sheldon Whitehouse: The problem is that even if you do that, you still haven’t solved the underlying problem, which is that we’re putting Earth’s natural systems into wild spins and crashes.
Nat Hardy: That’s US Senator from Rhode Island Sheldon Whitehouse. He chaired the Senate Budget Committee that published the report on home insurance and climate change. He says:
Senator Sheldon Senator Sheldon Whitehouse: The insurance folks are looking ahead at a very frightening future, and they’re dramatically changing their behavior. And that problem doesn’t go away until they have some confidence that we’re going to solve the climate problem.
Nat Hardy: Dave Jones, the director of the Climate Risk Initiative at the UC Berkeley school of law and the former Insurance Commissioner for California, puts it this way:
Dave Jones: We continue to march towards an uninsurable future because we’re not doing enough about the underlying driver of this, which is fossil fuels and greenhouse gas emitting industries.
Juliana Merullo: Dave says it’s important to note that US insurance companies have invested over half a trillion dollars in the fossil fuel industry.
Nat Hardy: So, they’re supporting the industry that’s making their jobs a lot harder.
Juliana Merullo: The Trump administration has made it very clear that it’s not worried about climate change, but Dave still has hope:
Dave Jones: States still have a lot of regulatory authority and states are going to need to do even more if we’re going to avoid a very, very bleak future that we’re continuing to to move steadily towards as a result of climate change.
Megan Hall: So I guess we’ll need to keep an eye on the states?
Nat Hardy: Definitely! And Senator Whitehouse says that as more Americans feel the economic impact of climate change, they might put pressure on federal policy makers.
Senator Sheldon Whitehouse: We just aren’t there yet, but it’s coming. It’s a race. Really, does that popular pressure happen first? Or do we have the irretrievable tipping points of climate crisis that happen first? Let’s hope it’s the popular that happens first.
Juliana Merullo: Does that make you feel any better Megan?
Megan Hall: Not really… But, Thanks Juliana, and Nat!
That’s it for today. You can find more information, or ask a question about the way your choices affect our planet, at askpossibly.org. You can also subscribe to Possibly wherever you get your podcasts or follow us on Instagram, Facebook, LinkedIn, X, or Bluesky at “askpossibly”
Possibly is a co-production of Brown University’s Institute for Environment and Society, Brown’s Climate Solutions Initiative, and the Public’s Radio.
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