Major insurance companies are pulling out of states like California and Florida where the risk of storms and wildfires is high, and now, experts warn the effects will soon extend nationwide.
An estimated one in four American homes or about 39 million properties are under too large of a financial risk for insurance companies to cover them.
That includes 19% of homes in Santa Clara County, 40% in Contra Costa County, and over 52% of homes in Solano County are vulnerable to dramatic changes in insurance coverage -- that’s if they’re not experiencing them already.
People who choose to leave California may end up living in another place where 100% of homes are at risk.
Get a weekly recap of the latest San Francisco Bay Area housing news. Sign up for NBC Bay Area’s Housing Deconstructed newsletter.
Governor Gavin Newsom signed an executive order Wednesday, urging California insurance commissioner Ricardo Lara to help.
Lara said the state will write new rules to let insurers look to the future when setting their rates. But companies will only get to do this if they agree to write more policies for homeowners who live in areas with the most risk.
Whether it’s government intervention or no action at all, real estate and climate experts say every path forward carries some cost.
Local
“We can either address this problem collectively through democracy or we can leave it up to wall street. And right now, wall street is driving the wagon and making the decisions,” said Jesse Keenan of Tulane University. “And my hope is that through insurance regulators working together, we can begin to think about transition plans and managing risk in our economy.”
