PLACERVILLE, Ca. (InEDC) David Arkush, Carly Fabian , July 12, 2023 2:35 p.m.
Like a bad neighbor, State Farm is gone from California
State Farms has pulled out of California, citing the wildfire risk and high cost of construction in the state.
PLACERVILLE, Ca. (InEDC) David Arkush, Carly Fabian , July 12, 2023 2:35 p.m.
State Farm’s decision to stop providing new homeowners insurance policies in California is an indicator of the growing damage caused by climate change. As climate-driven disasters lead to higher losses, insurers like State Farm will raise prices and cut back coverage or even flee.
Far from neutral victims, though, insurers are profiting from both sides of this crisis. They collect premiums and investment profits from fossil fuels while extracting ever more from consumers whom they plan to abandon.
To be clear, there is no question that climate change is disrupting insurance markets. The rising frequency and severity of disasters are driving up the cost of insurance and destroying some insurance markets entirely by rendering areas “uninsurable.”
But there’s more going on here than a simple story of climate disasters disrupting the math of insurance.
The root cause of the climate crisis is the rampant burning of fossil fuels. Insurers are critical gatekeepers for the fossil fuel industry, providing the insurance that allows companies to operate. As experts in evaluating risk and extreme weather, insurers knew about climate change early on. But in their pursuit of short-term profits, they didn’t stop underwriting fossil fuels.
Many are still underwriting the most reckless and dangerous parts of that sector, like …
