This blog post examines how climate change–driven extreme weather is inflicting widespread damage across the United States and reshaping the insurance landscape for homeowners and small businesses.
It summarizes recent 2024 losses, highlights insurer responses — from premium hikes to policy cancellations — and explores where consumers might find better coverage while addressing the paradox of insurers investing in fossil fuels that help drive the problem.
Climate-fueled disasters in 2024: scale and scope
Scientific evidence links higher global temperatures, warmer oceans, and shifting weather patterns to more intense storms, floods, droughts, and wildfires.
In 2024 alone, the economic consequences were staggering: more than $500 billion in total damages, including $58 billion in property losses tied to 17 severe storms, five hurricanes, one wildfire, and one drought.
The human and economic toll
These large-scale losses translate directly into financial stress for families and small businesses.
Insurance coverages that once provided reliable safety nets are under pressure, and the impacts ripple through local economies and recovery timelines.
Recent events that contributed to the 2024 tab include:
How insurance companies are reacting
Faced with growing payouts, many private insurers are changing how they manage risk — and the results are often punitive for policyholders.
Insurers have been denying claims, raising premiums and deductibles, canceling policies, and narrowing coverage options.
At the same time, executive compensation in the sector remains high.
Numbers that matter for policyholders
From 2021 to 2024, the average increase in insurance premiums was $648 per policy.
Since 2018, insurers have dropped roughly 1.9 million households while overall rates climbed about 40 percent.
These trends are reshaping who can afford recovery after a disaster and who is left exposed.
The paradox: insurers investing in the problem
Adding to public frustration is the fact that several major insurers are still investing heavily in fossil fuel industries — the primary contributors to greenhouse gas emissions and climate change.
These investments increase systemic risk and create an optics problem: companies profiting from fossil fuels while raising costs and reducing coverage for victims of climate-fueled disasters.
Examples of conflicting investment strategies
Two notable examples include Liberty Mutual’s roughly $1.8 billion in fossil fuel investments and Berkshire Hathaway’s approximately $95 million exposure.
Berkshire owns large insurers like GEICO.
These allocations underline a sector-level inconsistency between investment portfolios and long-term risk management strategies.
Practical advice and policy options
For consumers seeking protection amid rising volatility, experts suggest considering mutual insurers or smaller regional companies.
These entities are often more accountable to policyholders, less tied to fossil-fuel-heavy portfolios, and sometimes more willing to offer tailored coverage in high-risk communities.
Public support for broader solutions
Public sentiment is shifting toward collective action. A Yale study reports that 67 percent of Americans are concerned about extreme weather, and 68 percent support creating a national insurance fund to assist disaster victims.
Such a fund could stabilize premiums and spread risk more broadly. It could also speed recovery for communities hit hardest by climate impacts.
Here is the source article for this story: Mid-Ohio Valley Climate Corner: Climate change, extreme weather and insurance companies