To millions of home and car owners, the first indicate of a crisis was steep premium increases in 2023 and 2024.
Some had their policies canceled, while others found they could only get insurance through state-sponsored insurance pools where premiums are higher and coverage scantier.
Insurance companies aren’t profiteering by gouging customers. They don’t many any money at all from cancelled policies and rejected applications. Besieged by a Niagara of claims, they’re leaving some markets and raising premiums for everyone else to survive.
Worse driving resulting in more accidents, more expensive cars, a rise in car thefts, rising medical costs, and higher labor and parts costs have driven up auto insurance premiums (see story here).
Colossal property losses from violent storms, flooding, and wildfires have driven up home insurance premiums, and driven some companies out of some states (notably Florida). California, especially, is prone to fires; and people there have built homes in places where homes shouldn’t be built at all (see story here).
Climate change also is driving insurance losses (see article here). It doesn’t matter whether you believe climate change is real or a hoax; every year is getting hotter (see stories here and here), and climate change will affect you whether you acknowledge it or not.
Insurance companies can’t control what’s driving up insurance losses. They can only raise premiums, or stop insuring certain risks; they’re doing both. Better human behavior could reduce car accidents and avoid some property losses, but we have to live with climate change, which is causing more frequent and violent storms, and the drier conditions conducive to fires. And climate change will get worse, leading to a continually worsening insurance crisis.