Insurance Industry Is Throwing Its Customers Under The Bus

A new report from Inside Track, a group of senior insurance professionals, warns that insurers are quietly pulling back on climate-related coverage rather than helping homeowners and governments prepare for growing risks. The group says firms are responding in three ways: raising prices until coverage becomes unaffordable, narrowing what policies actually cover (for example, dropping wildfire protection from a homeowners policy), or leaving certain areas entirely. The report's authors say this process has already started and will speed up, leaving more homeowners facing losses with no insurance to cover them.

The warning lines up with what's already happening on the ground. State Farm has stopped covering wildfire damage for some California homeowners. In Florida and Louisiana, hurricane insurance now costs about three times what it did in 2023, when you can find a company willing to write a policy at all. Executives at insurers Aviva and Allianz have said some newly built homes, and even whole regions, are becoming uninsurable because of flood and climate risk.

For homeowners, the takeaway is that insurance costs and availability in high-risk areas, coastal, flood-prone, or wildfire-prone, are likely to keep getting worse rather than stabilize. If you live in one of these areas, it's worth checking your own policy closely for new exclusions and watching whether your insurer or state regulator makes changes to coverage, since the report suggests these shifts are accelerating rather than letting up.