Home Insurance Major insurance companies may pull out of all US states with high risks of storms, wildfires – NBC Bay Area

Major insurance companies may pull out of all US states with high risks of storms, wildfires – NBC Bay Area

by Cedric Guzman

The increasing risk of natural disasters, such as storms and wildfires, is causing major insurance companies to pull out of high-risk areas like California and Florida. Experts are now warning that these effects will extend nationwide, leaving millions of American homes without insurance coverage.

It is estimated that around one in four American homes, which totals about 39 million properties, are deemed too financially risky for insurance companies to cover. This alarming statistic highlights the growing concern for homeowners across the country. Regions in California, such as Santa Clara County, Contra Costa County, and Solano County, are particularly vulnerable, with high percentages of homes at risk. For example, over 52% of homes in Solano County face significant changes or loss of insurance coverage.

The repercussions of this insurance crisis are far-reaching. People who decide to leave high-risk areas like California may find themselves moving to other regions where the risk is just as great, leaving no safe haven for homeowners seeking coverage. This situation poses a serious challenge for individuals looking to protect their properties and assets.

In response to this crisis, Governor Gavin Newsom signed an executive order urging California insurance commissioner Ricardo Lara to take action. Lara has stated that the state will introduce new rules that allow insurers to consider future risks when setting insurance rates. However, this will only be possible if insurance companies agree to underwrite more policies for homeowners residing in high-risk areas.

Deciding the best course of action comes with its own set of challenges. It is a question of whether to intervene through government regulation or to avoid any action altogether. Real estate and climate experts believe that every path forward carries some cost. The concern lies in determining who will be responsible for managing and mitigating the risks associated with climate change.

Jesse Keenan of Tulane University emphasizes the importance of addressing this problem collectively through democracy rather than leaving it solely to the decision-making power of Wall Street. Keenan suggests that by working together, insurance regulators can develop transition plans and effective risk management strategies to protect the economy and communities.

As the insurance landscape continues to evolve, it is crucial for homeowners to stay informed about the risks they face and seek alternative solutions. Understanding the potential consequences of the insurance crisis, both in terms of finances and personal safety, can help individuals make informed decisions about their properties and future plans.

To gain a better understanding of the risk in specific counties or across the United States, individuals can refer to a resource provided by NBC News. The tool provides valuable insights into the level of risk homeowners face and can assist in making informed decisions regarding insurance coverage.

In conclusion, the increasing risk of natural disasters is pushing major insurance companies to withdraw coverage from high-risk areas across the United States. Millions of American homes find themselves without insurance, with regions in California being particularly affected. Finding a solution to this insurance crisis requires collective action and effective risk management strategies. Homeowners must be proactive in understanding the risks they face and seek alternative solutions to protect their properties and assets in the face of climate change.

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