The home insurance crisis isn’t going away — it’s getting worse.
Our property insurance system was built for a different kind of world, where risks could be reliably predicted and insurers could make sizable profits just by doing business as usual. But that’s not the world we live in anymore.
Every year, climate impacts get more severe and harder to predict. Places thought of as safe from catastrophic flooding and wildfires no longer are. So the insurance system is collapsing, and nobody has a comprehensive plan to fix it. That’s what the Insurance Fairness Project is trying to address.
How did we get here?
A perfect storm of factors has brought the insurance system to the brink of collapse:
Climate-driven weather events, which are growing ever more extreme and unpredictable
Out-of-date risk models
A “duration mismatch” between annual policies and decades-long mortgages
Insurance companies fighting reform to protect their profits
A lack of accountability, allowing insurers and politicians to shift the burden onto homeowners and taxpayers
Ordinary Americans are already paying the price.
Climate-battered communities across the nation are feeling the first wave of the economic shock. And as the crisis spreads, it will start attacking the foundations of our economy — and could bring it all crashing down:
Families have lost their homes and their savings
People rooted in disaster-prone areas have found themselves with nowhere to go
Small businesses will be forced to close
Communities will see their tax base collapse and need to slash budgets for schools, roads, and public services
The solution is complex. But the problem can be solved — if we act together.
A bailout can’t solve this. All the problems driving the crisis will keep getting worse, unless we craft a comprehensive response that centers people and tackles the problems at their root. That’s the only way to prepare our economy to anticipate and accommodate climate shocks without seeing families made homeless and communities destroyed.