Homeowners left in lurch amid concerning insurance industry trend: 'I basically lost everything'

As the U.S. braces for another hurricane season, residents of a Floridian island are facing an additional threat: the loss of insurance after decades of reasonable premiums and coverage.

What's happening?

The residents of Sanibel Island recently spoke with Yale Environment 360 about the devastating fallout from recent hurricanes, including Ian, Helene, and Milton.

"We had so many good years, 30 or 40 years, we were spoiled," said Daniel Moore Thompson, whose house and gift shop business both flooded. "And then Ian happened, and it was like we lost our innocence. I basically lost everything except my Jeep and dog."  

The National Flood Insurance Program, which sells most flood policies, received $620 million in claims from Sanibel. That's 100 times more than all the money the NFIP has paid out to Sanibel residents in the past 40 years. 

Sanibel hadn't experienced that kind of extreme weather for years, and insurance companies based their policies on standard models and easy predictions. But over recent years, with the increase in extreme weather events, claims have increased. Companies have been canceling policies or refusing to insure people living in affected areas like Sanibel.

Why is canceled insurance important?

Canceled and disappearing insurance policies are tied to the increase in extreme weather events. Many insurers across the country, from Florida to California, have dropped policies for residents living in the paths of hurricanes, wildfires, and tornadoes.

These extreme weather events have been exacerbated by human activities, like burning dirty energy sources, according to NASA. As these events increase, increased insurance rates and lost coverage hurt communities and leave people stranded. 

What's being done about canceled insurance?

According to Yale Environment 360, one potential solution is for the federal government to step in and support the insurance market. This would be similar to the already existing federal flood insurance program. 

Companies are also facing penalties for unfair practices, and many states are looking into adjusting legislation to support homeowners. Accountability is key in preventing companies from leaving homeowners vulnerable to damage from extreme weather events.

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