From the Capitalism Can't Do The Job Files: Insurance companies are buggering out

One of the major impacts of climate change that is starting to be felt is insurance that has either become too expensive to buy, or not available at all. In Florida, homeowners are increasingly unable to get insurance at any cost. Now, a major hit has come in California. The NYT writes:

Climate Shocks Are Making Parts of America Uninsurable. It Just Got Worse.

The largest insurer in California said it would stop offering new coverage. It’s part of a broader trend of companies pulling back from dangerous areas.

The climate crisis is becoming a financial crisis.

This month, the largest homeowner insurance company in California, State Farm, announced that it would stop selling coverage to homeowners. That’s not just in wildfire zones, but everywhere in the state.

Insurance companies, tired of losing money, are raising rates, restricting coverage or pulling out of some areas altogether — making it more expensive for people to live in their homes.

“Risk has a price,” said Roy Wright, the former official in charge of insurance at the Federal Emergency Management Agency, and now head of the Insurance Institute for Business and Home Safety, a research group. “We’re just now seeing it.”

In parts of eastern Kentucky ravaged by storms last summer, the price of flood insurance is set to quadruple. In Louisiana, the top insurance official says the market is in crisis, and is offering millions of dollars in subsidies to try to draw insurers to the state.  

And in much of Florida, homeowners are increasingly struggling to buy storm coverage. Most big insurers have pulled out of the state already, sending homeowners to smaller private companies that are straining to stay in business — a possible glimpse into California’s future if more big insurers leave.

State Farm, which insures more homeowners in California than any other company, said it would stop accepting applications for most types of new insurance policies in the state because of “rapidly growing catastrophe exposure.”

The company said that while it recognized the work of California officials to reduce losses from wildfires, it had to stop writing new policies “to improve the company’s financial strength.” A State Farm spokesman did not respond to a request for comment.  

Florida, despite its challenges, has an important advantage: A steady influx of residents who remain, for now, willing and able to pay the rising cost of living there. In Louisiana, the rising cost of insurance has become, for some communities, a threat to their existence.

Like Florida after Andrew, Louisiana’s insurance market started to buckle after insurers began leaving following Hurricane Katrina in 2005. Then, starting with Hurricane Laura in 2020, a series of storms pummeled the state. Nine insurance companies failed; people began rushing into the state’s own version of Florida’s Citizens plan.

California wildfire in 2021

Hm. A big for-profit insurance company calls climate change impacts a source of rapidly growing catastrophe exposure. What does the radical right Republican Party call it? Alarmism. A hoax. A joke. God's plan. The weather. Weaponization of the weather. Socialism. Evil lies. Etc.

There are just some things that capitalism cannot or refuses to do well due to the moral profit imperative. Things that come to mind are insurance, professional journalism, health care delivery, water, gas and electric utilities and major infrastructure including the internet. In those areas, capitalism sucks and we get the shaft.

If capitalism cannot or will not do the job, what is left? Socialization of the job by the federal or state governments is one option. Another option, the current Plan A, is to just let people go pound sand when they cannot insure their homes or drop dead when they cannot afford health care. Capitalism just doesn't care about those things.

How Christian nationalism sees climate change:

A socialist Democratic Party hoax!