‘Priced Out of California’ – How Insurance Industry is Responding to Risks Posed by Climate Change


Devastation from Dixie Fire

Tony and Jhan Dunn never thought they would leave California. They grew up in San Diego, built a life together in the state and planned to retire here.

But after a wildfire swept through their Northern California town of Paradise three years ago, burning their home to the ground, they could not get insurance to buy another.

“We basically got priced out of California,” Dunn, a retired planning specialist, told Reuters from the couple’s new home in North Carolina.

“It was sad because we both spent our whole lives in California,” he added.

There are thousands of homeowners and businesses from California to Australia in a similar position because the insurance industry, known for its readiness to cover anything from Bruce Springsteen’s vocal chords to alien abductions, has trouble factoring in climate change.

The tried-and-tested approach, where decades’ worth of historical data serve to estimate future claims, falls short when weather patterns change and hurricanes, floods, heat waves or snowstorms become more extreme and unpredictable, industry experts say.