State lawmakers aim to sue industry for rising insurance costs: '[It] is an absolute crisis'

With rising premiums and denied claims becoming more common, homeowners across the United States are struggling to properly insure their homes. However, some state lawmakers are introducing legislation to bring some much-needed stability back to the insurance market. 

What's happening?

As the Guardian reported, legislators in California, Hawai'i, and New York are advancing bills to hold major companies accountable for their role in increasing the risks of major climate disasters. 

Over the last several years, countless homeowners have filed massive claims stemming from damages caused by wildfires, floods, and strong storms. In many cases, damages from climate-driven disasters have led to insurance premiums soaring. 

Following the 2023 Maui wildfire that caused the deaths of over 100 people and more than $5 billion in property damages, homeowners saw an alarming number of insurance providers dropping policyholders in addition to dramatically raising premiums. 

"They just packed up and left," Hawai'i state senator Jarrett Keohokalole told the Guardian. The lawmaker introduced Senate Bill 3000 in January to compel energy companies to pay for infrastructure and insurance damages caused by climate disasters. 

"Without a doubt, the increasing incidence of really devastating natural disaster events is what's driving the insurance crisis," Keohokalole added. "Whose fault is that? We know."

Why is an increase in climate-based disasters concerning?

Experts have argued that the surge in climate-related disasters is primarily due to human activities that have increased global temperatures. The burning of coal, oil, and gas has led to a rise in harmful air pollution, which can trap heat in the atmosphere and drive higher temperatures.   

As a result, many communities worldwide have observed changes in historic climate patterns. This includes more intense storms and extreme rainfall in some regions, while others experience prolonged droughts and wildfires. 

Keohokalole noted that homeowners are left to bear the burden of paying for climate-based disasters that are exacerbated by the activities of massive energy companies.  

"Residents shouldn't have to pay for the risk mitigation of private entities, full stop," Keohokalole said. "It's time for a comeuppance." 

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What's being done to combat rising insurance premiums?

Like Hawai'i, other state lawmakers are now designing bills to provide relief and keep insurance costs more affordable for homeowners. This includes targeting energy companies for their role in rapidly changing climate conditions.    

In California, state senator Scott Wiener introduced the Affordable Insurance and Recovery Act to help offset increasing premiums. 

"The cost of home insurance in California is an absolute crisis," Wiener told the Guardian.

The bill would allow the state's Attorney General to sue oil and gas companies for costs associated with climate-related events that have driven up insurance premiums for homeowners. 

"We know that the years ahead are going to be dramatically more dangerous, tragically, when it comes to climate disasters, and we can't allow Californians, our residents, our small businesses, to be left holding the bag," added Wiener. 

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