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Major U.S. insurance companies, including Allstate, American Family, Nationwide, Erie Insurance Group, and Berkshire Hathaway, are discontinuing certain coverage options, excluding protections against natural disasters, and increasing premiums due to extreme weather patterns linked to climate change. They have cited climate-driven events as the reason behind these policy changes. Insurance providers are particularly reducing coverage for properties in coastal areas and wildfire-prone regions. Some are also pulling back from areas vulnerable to hurricanes.
These changes mean that homeowners in once-safe areas may lose essential insurance protections as their exposure to natural disasters grows. Insurance firms have been paying record amounts in claims for natural disasters in recent years, prompting them to reevaluate their risk exposure. These policy shifts may inconvenience some consumers but are considered necessary for the broader insurance market’s survival.
Overall, climate change-related risks are reshaping the insurance industry, leading to policy changes that reflect the increasing frequency and severity of weather-related catastrophes. This poses challenges for homeowners and calls for innovative solutions to adapt to the evolving climate risk landscape.
Source
Home insurers cut natural disasters from policies over climate risk – The Washington Post