Homeowners file groundbreaking lawsuit over insurance costs: '[These companies have] lied for decades'

Two homeowners in Washington state have filed an unprecedented lawsuit against Big Oil over skyrocketing home insurance premiums that they say are climate-related. 

According to Inside Climate News, the case was filed in late November in the U.S. District Court in the state's Western District and is the first of its kind to target dirty fuel companies over unreasonable home insurance costs. 

The plaintiffs say oil companies downplayed the impacts of burning oil and gas on the climate, which has led to more frequent extreme weather events that have contributed to the insurance crisis. 

In Washington, insurance premiums have risen by more than 50% since 2019. Resident Richard Kennedy, one of the homeowners involved in the lawsuit, said his premiums have more than doubled since 2017. Margaret Hazard, the other plaintiff, reported similar spikes in home insurance rates.

The class-action lawsuit they filed covers all homeowners who have or plan to buy insurance after 2017 nationwide. Homeowners insurance premiums have increased nationwide, with a January report from the Department of the Treasury showing that average premiums rose 9% faster than overall inflation from 2018 to 2022. 

According to Program Business, many homeowners near dense forests are experiencing reduced or severely limited coverage, particularly in wildfire-prone areas. A 2016 report by Climate Central found that the number of large fires burning annually has increased fivefold in Washington since the 1970s. 

Unfortunately, the insurance industry is trying to play catch-up because existing risk models have tended to underestimate impacts, leaving homeowners vulnerable and underinsured. Meanwhile, studies have found that the oil and gas industry has known the devastating impacts of its activities on the climate since the 1970s.

But with more states, cities, and even individuals suing oil companies to hold them accountable for the destruction brought by climate change, the tides might finally be turning. 

The Washington lawsuit, Kennedy v. Exxon et al., involves both federal and state law claims, including violations of the Racketeer Influenced and Corrupt Organizations Act, fraudulent misrepresentation, and civil conspiracy.

The plaintiffs say the industry withheld information from the public and engaged in greenwashing by portraying oil and gas as climate-friendly without taking adequate steps to protect the environment. The suit names major oil companies, including Exxon, Shell, BP, and Chevron, and alleges that the defendants have earned over $2 trillion in profits since 1990. 

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With natural disasters increasing in frequency and severity over the past decade, insurance companies have had to raise premiums to cover massive losses driven by climate-related events such as hurricanes, wildfires, and floods. 

According to Hagens Berman, the law firm representing Kennedy and Hazard, the costs of natural catastrophes have far exceeded the ability of homeowners and insurers to pay in recent years.

"Higher insurance premiums are the result of the fossil fuel industry's decades-long campaign of disinformation to obstruct climate action," U.S. Sen. Sheldon Whitehouse told Inside Climate News in an emailed statement. 

"We are already seeing signs of the Great Climate Insurance Collapse, which will cascade into a collapse in property values that will trash our entire economy. Just like Big Tobacco, Big Oil has lied for decades to the American people about the full extent of the harms of its products and must be held accountable."

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