Climate change main reason for home insurance policy drops

CEDAR RAPIDS, Iowa (KCRG) – Climate change is the reason millions of Americans have had their home insurance plans dropped, according to a report U.S. Senators reviewed at the final Budget Committee hearing of the legislative session.

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“When insurance becomes unavailable, it can be impossible to get a mortgage,“ Budget Committee Chairman Sen. Sheldon Whitehouse (D) Rhode Island said.

The Budget Committee collected home insurance data that found climate change is to blame for almost two million non-renewals over the last five years.

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A non-renewal is when an insurance provider drops your insurance.

“That amount represents 1.9 million times that a household had to quickly find a new insurer. Very likely at a high premium. While juggling many other expenses and commitments on their time,” Benjamin Keys of Wharton Business School, a witness at the hearing said.

The report found that Iowa had the 15th most home insurance non-renewals of all the states in 2023 with natural disasters driving up costs and non-renewals.

“The multiple climate-related effects: hurricanes, wildfires, severe convective storms, extreme precipitation and sea level rise, are destabilizing wide-spread insurance markets,” Sen. Whitehouse said.

Iowa Senator Chuck Grassley said while climate change is an important topic he said it should be part of the Energy Committee instead of the Budget and blamed the Biden Administration.

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“Rather than admit inflation fueled by reckless spending caused insurance premiums to spike, climate change is used as the main scapegoat,” Grassley said.

Of the three witnesses at the hearing, one downplayed the impact climate change was having on the home insurance industry. But the Senate report and the other witnesses agreed with the findings that climate change is the main driver.

“Unless the United States and the world rapidly transition to clean energy, climate-related extreme weather events will become both more frequent and more violent. Resulting in ever scarcer insurance and ever-higher premiums,” Sen. Whitehouse said.

You can access the Senate Budget Committee Report on insurance and climate change, here.

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