Weekly Roundup: New Investigation in California, Financial Scrutiny for Insurers, and Scattershot Solutions (Copy) (Copy)
FOR IMMEDIATE RELEASE
June 27, 2025
Contact: contact@insurancefairnessproject.com
Weekly Roundup: Financial Meltdown Incoming, L.A. Fire Survivors Win In Court, Profiting Off Disaster
Each week, the Insurance Fairness Project highlights the latest developments in the national climate-driven property insurance crisis.
1/ FINANCIAL MELTDOWN INCOMING: The insurance crisis could trigger a broader financial crisis worse than 2008, as repeated climate shocks push us to the breaking point.
Financial Times: How the next financial crisis starts
Climate-driven financial havoc, even if it happens in slow motion, could be more menacing than past financial chaos. That’s because it would not be caused by financial failures that are typically followed by a recovery, but by global carbon emissions that the world has spent more than 30 years struggling to cut.
2/ AFFORDABLE HOUSING SQUEEZE: The insurance crisis is slowing affordable housing development nationwide — including in Texas and California — even as demand and public pressure to build intensifies.
San Francisco Chronicle: California insurance crisis could have dire consequences for affordable housing
Because most expenses are nonnegotiables, such as payroll and maintenance, keeping up with insurance payments can mean dipping into funds earmarked for longer term projects. [...] [F]uture projects could be in jeopardy if insurance — a prerequisite for securing loans — is just too expensive, or if developers’ reserves have been too depleted to buy properties in the first place. [...] “We’re being asked to build more, and yet we are struggling to protect what we have,” Chan said. “The candle’s burning at both ends.”
3/ FIRE SURVIVORS WIN IN COURT: On Tuesday, a judge ruled California’s FAIR plan is violating state law by offering less coverage than what's required by state law — a huge win for L.A. fire survivors who are still fighting with their insurers over toxic smoke contamination.
Los Angeles Times: Wall Street investors try to profit from Eaton Fire insurance claims
The FAIR Plan’s handling of smoke-damage claims has angered homeowners who say that instead of being promptly offered industrial hygienic testing for toxic substances and professional cleaning services — even after homes were infiltrated by soot, ash and other fire debris — they were told to try to clean up their properties and given low-ball offers to close their claims.
With hoses, Etta and her son saved their Altadena home in January's wildfire. But the winds blew thick smoke, ash and debris inside. That smoke often fills homes with all manner of lung-damaging particulates as well as blood and brain-threatening toxins.[. . .] "I was looking at something like $80,000 to a hundred grand to remediate my home. Even though the hygienist report said that your home is filled with lead and should be remediated by a professional company, two days later I got the denial in writing," said Etta.
The New York Times: Toxic homes: What the LA fires left behind
4/ DISASTER PROFITEERING: Wall Street hedge funds are still trying to profit off the L.A. wildfires by buying insurer subrogation claims against Southern California Edison, which could mean big profits if the utility is found liable for the Eaton fire.
“I think everyone in this room looks at a catastrophe, like what happened in Southern California, and our natural instincts are to say, ‘What can we do to help?’” Tom Welsh, the chief executive of the California Earthquake Authority, which manages the state’s wildfire fund, said at a recent public meeting. “There are other actors in the environment who look at that situation in Southern California and ask instead, “What can I do to profit?’”
5/ NEW RESEARCH: Researchers at the Revolving Door Project and Public Citizen are mapping out the insurance crisis in North Carolina — and tracking pressure from state insurance commissioners and their Congressional counterparts to eliminate the Federal Insurance Office.
Now, this data reveals troubling patterns across the state, including warning signs that private insurers were pulling back in western North Carolina long before Hurricane Helene hit in the fall of 2024. Causey’s strident criticism of FIO appears particularly out of touch with his state’s exposure to fossil fuel-driven climate damages.
Revolving Door Project: Mapping the Home Insurance Crisis: Anti-FIO States
State insurance commissioners, the National Association of Insurance Commissioners (NAIC), and lawmakers from climate-vulnerable states should be leading the charge to preserve U.S. climate data infrastructure. Instead, a coordinated campaign has narrowed in on the opposite priority: gutting the Federal Insurance Office (FIO), the small group in the Treasury Department responsible for tracking the costs of climate change to insurance consumers. By attacking the Treasury Department’s ability to collect insurance-related climate data, these officials could ensure the data on those collective costs will never reach the public.
Resources
Insurance Fairness Project: Polling – Voters Want Their Government to Address the Property Insurance Crisis
Public Citizen and the Revolving Door Project: Mapping the Home Insurance Crisis
Consumer Federation of America: Overburdened: The Dramatic Increase in Homeowners Insurance Premiums and its Impacts on American Homeowners
Brookings Institution: Homeowners insurance in an era of climate change
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The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
