Managing the Climate Change-Fueled Property Insurance Crisis

Article by American Progress (2025) | Policy, Insurance, Standards

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In the past year, the United States has faced escalating climate-related disasters, including deadly wildfires in Los Angeles and catastrophic flooding from Hurricane Helene in the Southeast, resulting in hundreds of lives lost, widespread displacement, and billions in damages. These events underscore the intensifying impact of climate change, which drove 27 billion-dollar disasters in 2024 alone, costing $183 billion. The insurance sector, vital for financial recovery, is increasingly strained, reducing coverage, exiting high-risk areas, and raising premiums, thus leaving many households, especially low-income and marginalized communities, unprotected. As private insurers retreat, public programs like Fair Access to Insurance Requirements (FAIR) and National Flood Insurance Program (NFIP) are absorbing more risk, often funded by taxpayers.

The publication highlights how correlated climate losses are undermining insurers’ abilit…