When the Los Angeles wildfires left billions of dollars in damages to homes and properties behind last month, it was clear that the state’s insurance market would be rocked. Indeed, on Monday, citing a “dire situation,” State Farm, the largest insurance group in California, asked state regulators to allow it to hike insurance rates — 22 percent for homeowners, 15 percent for condominium owners and 38 percent for renters — to maintain its own financial solvency. Californians are far from the only ones seeing their insurance premiums rise. As ProPublica’s Abrahm Lustgarten writes in a guest essay this week, home insurance prices are surging around the country as climate change makes weather more extreme and more damaging. According to a new analysis by First Street, a research firm that studies climate threats to housing, rising insurance rates and growing climate risk are already beginning to drag down home values in what could amount to a staggering reversal in how most Americans amass wealth over a lifetime. In all, the firm predicts nearly $1.5 trillion in asset losses over the next 30 years. “Not long ago, insurance premiums were a modest cost of owning a home, amounting to about 8 percent of an average mortgage payment,” writes Lustgarten. “But insurance costs today are about one-fifth the size of a typical payment, outpacing inflation and even the rate of appreciation on the homes themselves. That makes owning property, on paper anyway, a bad investment.” Already, large numbers of Americans are moving. And it’s just the beginning of an enormous shift: More than 55 million Americans could migrate within the country in response to climate risks in the next three decades, driving “climate haves and have-nots further apart, especially as relatively safe regions emerge,” Lustgarten notes. Here’s what we’re focusing on today:
We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times. Games Here are today’s Mini Crossword, Wordle and Spelling Bee. If you’re in the mood to play more, find all our games here. Forward this newsletter to friends to share ideas and perspectives that will help inform their lives. They can sign up here. Do you have feedback? Email us at opiniontoday@nytimes.com. If you have questions about your Times account, delivery problems or other issues, visit our Help Page or contact The Times.
|
