The U.S. Department of the Treasury is moving toward launching a nationwide assessment on property insurance in disaster-prone areas to determine whether insurers are refusing to cover homes and businesses in these areas.
According to E&E News, the Federal Insurance Office recently sent an email to insurance regulators in all 50 states asking if they have data on insurance coverage, liabilities, and losses in each ZIP code over the past five years.
The data would help the FIO determine whether insurers are not covering properties in areas vulnerable to the effects of climate change, including wildfires and intense storms and flooding.
According to Climatewire, the timeline of events leading up the the assessment are as follows:
- In May 2021, FIO is directed to look into the “potential for major disruptions” of insurance availability in areas vulnerable to climate change via an executive order
- In August 2021, the FIO requests public comments on climate change’s effects on insurance
In the past three years, hundreds of thousands of Florida residents in particular have discussed losing coverage due to hurricane claims, which has forced them to purchase costly state-run insurance policies.
California wildfires have impacted policies within the state as well.
The FIO emailed state officials about its plans to initiate the assessment. E&E News requested the email, and reported that with data from each state, the FIO will study the “impact [of climate change] on protection gaps and insurance availability, particularly in at-risk markets.”
The email allegedly is not a request for data, but an inquiry on what data is available within each state.
From there, officials can understand whether the data is even available for review, should they launch a full assessment in the future.
Experts say the FIO could learn that the data isn’t as easily accessible or as readily available as it should be, but that analyzing this data is essential to understanding how deeply climate change is affecting insurance accessibility and affordability.
According to a report from the Center for American Progress, in addition to the FIO information request, other entities are beginning to take climate risks more seriously.
New York’s Department of Financial Services, for example, recently issued guidance to companies on disclosing climate-related risks.
In April, the report said the National Association of Insurance Commissioners required more comprehensive data reporting in its survey for disclosing climate risks.
Experts say the FIO’s information inquiry is a positive step to understanding the scope of climate change’s effect on insurance markets.
The findings should help both insurance companies and those affected by lacks or gaps in coverage.
Photo by Valdemaras D