Climate change and your insurance

Why climate change matters

Growing evidence suggests that climate change is worsening through droughts and other severe weather events, such as hurricanes, tornadoes, and floods. These natural disasters can destroy homes, cars, businesses and crops, leading to more and larger insurance claims.

As a result, insurers in some parts of the country have stopped offering coverage, and others have limited what they cover. It’s also meant higher insurance premiums that many people cannot afford, leaving them uninsured or underinsured.

Commissioner Kreidler doesn’t want to see that happen in Washington state. He believes we must take action today to make sure we are protected in the future.

Climate risk map (www.nrdc.org)

2013 Climate Risk Survey (www.insurance.ca.gov) of more than 1,000 insurance companies reveals the majority are seriously considering climate change. Companies with more than $100 million in premiums were required to respond.

On March 7, 2013, the climate- change group Ceres released a report, “Insurer Climate Risk Disclosure Survey: 2012 Findings & Recommendations" (PDF, 589KB) based upon a climate risk disclosure survey of 184 insures from all segments of the industry. The survey, which was administered by insurance departments in California, New York and Washington, was mandatory for insurers that reported more than $300,000,000 in premium for 2011 and voluntary for insurers reporting less.

Previously, in November 2012 Commissioner Kreidler authored an article on Adaptation and the Insurance Industry (www.climateactionprogramme.org) for the Climate Action report for the United Nations' COP18 meeting.

In September 2012, Ceres released a report examining the potential effects of climate change on U.S. property and casualty insurers (wwww.ceres.org). Commissioner Kreidler wrote the foreword to the report.

Actions to date

Commissioner Kreidler chairs the National Association of Insurance Commissioners’ (NAIC) Climate Change and Global Warming Working Group (www.naic.org), formed to:

  • Review risk-management efforts by carriers and how they may be affected by climate change.
  • Investigate the use of modeling by carriers and their reinsurers concerning climate change and its possible impact on insurers' investments.
  • Review the impact of climate change on insurance investments.

In June 2008, Commissioner Kreidler surveyed home and business insurers about their efforts to address the potential risks that climate change poses to insured losses.

In 2007, Commissioner Kreidler testified before the U.S. House of Representatives to discuss the issue and to push for proactive solutions. Read his testimony (PDF, 63KB).

Updated 08/21/2014

See also

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