Weekly Roundup: Extreme Weather is One of The Most Severe Threats Facing The Global Economy

Written By Rich Mintz

FOR IMMEDIATE RELEASE

January 23, 2025

Contact: contact@insurancefairnessproject.com

Weekly Roundup: Extreme Weather is One of The Most Severe Threats Facing The Global Economy

Each week, the Insurance Fairness Project highlights the latest developments in the national climate-driven property insurance crisis. For more insurance updates, follow us on LinkedIn, X/Twitter, and Bluesky.

1/ NEW REPORT SHOWS EXTREME WEATHER IS #2 AMONG CURRENT GLOBAL RISKS: The World Economic Forum released its Global Risks Report 2025 where extreme weather events emerged as one of the most severe threats facing the global economy. Extreme weather ranked #2 among current global risks and #1 over the next 10 years. This underscores that climate-driven shocks are no longer a future concern, but a present and escalating economic reality.

Here is a quote from the Insurance Fairness Project (that’s us!) on the report’s findings: 

“This report reflects a growing reality for households across the U.S.: climate risk isn’t theoretical, it’s already showing up in insurance bills, canceled policies, and shrinking options for coverage,” said Lizzy Price, a spokesperson for the Insurance Fairness Project. “Extreme weather is already reshaping affordability and access, and without stronger oversight, families will continue to pay the price for risks they didn’t create.”

Worsening climate impacts are also exposing a widening insurance gap. As extreme weather intensifies, insurers are raising costs, limiting coverage, and delaying or reducing payouts, leaving homeowners underinsured. Even those with coverage are finding it hard to fully rebuild, pushing families into debt or forcing them to abandon their homes. Together, these trends show how extreme weather is not only a climate crisis, but an affordability and housing stability crisis.

2/ COLORADO’S RESILIENCE LEGISLATION IS SPREADING TO OTHER STATES: A new proposal from Southern Oregon State Senator Jeff Golden seeks to reduce property insurance costs for Oregon homeowners who implement wildfire prevention measures. The bill (modeled after similar legislation in Colorado) requires insurers to factor in fire prevention efforts when determining rates. Similar legislation is under consideration in NY, WA, ID, and NM.

  • Salem Reporter: Oregon bill would require home insurers to consider wildfire prevention efforts

    “Despite homeowners investment in home hardening and defensible space, and despite public investments in community-level mitigation, many, if not all, insurers are not taking these mitigation measures into account in the computer models they use to price and to decide whether to write or renew insurance, what’s called underwriting,” Dave Jones, former California insurance commissioner, told lawmakers at a Wednesday meeting of the Senate Natural Resources and Wildfire Committee.


Meanwhile, Nevada's AB376 permits insurers to exclude wildfire coverage from standard homeowner policies, offering it instead through separate products. This change sparks affordability concerns, requiring separate wildfire coverage will likely increase total insurance costs, particularly in high-risk areas already facing high prices or limited access.

3/ OKLAHOMA IS TRYING TO FIX HIGH INSURANCE RATES: Oklahoma State Senator Julia Kirt is tackling rising homeowner's insurance costs with three bills aimed at expense control and increased oversight. The proposed legislation would cap insurer profits and mandate annual customer refunds of excess funds, grant the insurance commissioner more power to approve or deny rate hikes, and eliminate using credit scores in setting premiums.

4/ NEW POLL FROM UCLA SHOWS 1 IN 5 CA HOMEOWNERS HAVE DROPPED COVERAGE: The first UCLA Luskin California Poll surveyed state residents on key topics, including home insurance, climate change and financial stability. Alarmingly, the poll showed that more than 1 in 5 California homeowners have dropped their home insurance and most of these homeowners would prefer to remain in their current communities rather than move.

  • UCLA: Some homeowners are going without insurance but choosing to stay put

    “Policymakers need a clear understanding of the challenges Californians face,” said Gilens, a professor of public policy, political science and social welfare. “The UCLA Luskin California Poll supports more effective policymaking by systematically documenting Californians’ lived experiences with the urgent economic, environmental and political issues of our times.”

5/ COLORADO HOME INSURANCE COSTS ARE SOARING: Colorado's rising vulnerability to costly disasters is creating a challenging home insurance market. This "dual catastrophe" has fueled soaring rates, up over 200% since 2007, and made some areas nearly uninsurable. As insurer payouts increase, more companies are exiting high-risk areas, forcing homeowners to pay significantly higher costs for reliable coverage.

6/ AFFORDABILITY OUTRAGE TARGETS U.S. INSURERS: A growing public frustration over soaring home and auto insurance premiums is targeting the insurance industry, this is fueled by evidence of robust corporate profits alongside unaffordable customer costs. This has intensified the debate over insurers' risk pricing and the appropriate regulatory response, even as states approve higher home-insurance rates.

Resources

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.

Rich Mintz
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