"We're seeing more frequent, more severe extreme weather events and that inevitably affects claims and affects pricing it can't not. And this is happening all over the globe. More, after this week's most important reads."
"Lack of insurance doesn't just mean the foundation of a homeowner's security can be wiped out in an instant by a flood, wildfire or hurricane. Insurance is also the invisible backbone of modern economies: without its support, loans fail and the financial system crumbles."
"Commercial insurers are pulling out, leaving the state-backed insurers of last resort carrying the can, such as California Fair Plan (pdf), which has seen its exposure soar by 230% to $724bn since 2022."
Climate change is creating an insurance crisis that threatens both individual homeowners and the global economy. Rising extreme weather events—floods, wildfires, and hurricanes—are making homes uninsurable and forcing commercial insurers to withdraw from high-risk regions. State-backed insurers of last resort, like California's Fair Plan, are absorbing massive exposure increases. Governments in Spain, Portugal, and the UK are providing emergency aid as climate impacts intensify. This crisis creates mortgage prisoners—homeowners unable to sell flood-prone properties—and risks bank defaults. Insurance serves as the invisible backbone of modern economies; without it, loans fail and financial systems destabilize. Scientists project flood risk exposure will increase significantly, indicating the crisis is accelerating.
#climate-change-insurance-crisis #extreme-weather-and-property-risk #financial-system-vulnerability #mortgage-prisoners #insurer-market-withdrawal
Read at www.theguardian.com
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