What Will America Do When Insurance Companies Walk Away?
May 12, 2025
Many Americans have nowhere to hide in a future that's either too hot, too dry, too wet, or too chaotic.
In California, more damages are coming from wildfires.
In Florida, it's from hurricanes.
In Iowa, it's from hail.
Insurance companies are losing money in historically low-risk states like Iowa. In 2023, insurers lost money on homeowners coverage in 18 states, and this is only increasing.
When insurance companies face higher risks of extreme weather events, they are left with three options. They raise premiums by as much as 50 percent or more, cut back on coverage, or leave entire states altogether.
The CEO of an insurance company that left Iowa says, "Climate change is real… We can't raise rates fast enough or high enough."
There's a slippery slope. Without insurance, banks won't issue a mortgage. Without a mortgage, most people can't buy a home. With fewer buyers, home values are likely to decline, along with local tax revenues, leaving communities with less money for schools.
What can we do about this? Physical shocks from extreme weather are arriving faster and heavier. Investment strategies focused on adapting to the physical risks of a hotter world are gaining traction and will be a key tool whether you're investing for retirement or buying your first home.
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