Hurricane Risk Driving Up Cost of Insurance

Jack Payton sits outside his home that was badly damaged during Hurricane Humberto, September, 2007, High Island, Texas.

Photo: Dave Einsel / AP Photo

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State Farm Insurance sees more hurricanes striking the U.S. Gulf Coast, and so it's filing for permission to increase its home insurance rates for Texas, according to the Dallas Morning News.

This is only the latest example of insurance rates being affected by an increase in natural disasters. California homeowners are finding it increasingly difficult to insure homes, as wildfire risks have sapped supplies, and the threat of hurricanes and coastal flooding up and down the East Coast has driven rates higher.

These rate hikes follow the path laid out by Swiss Re and other international companies that insure the insurance companies. For several years now, these companies have warned that global warming is, or will, increase the destructiveness and frequency of natural disasters, and that insurers should hedge their bets. Scientists have predicted an increase in flooding and other extreme weather events because of global warming, and while it may or may not be likely that hurricanes will increase in strength or frequency, the increased population living on U.S. coasts puts more people at risk of severe storms.

No one wants to see their insurance premiums rise, to be sure. But it could be that this type of rate increase is a reflection of the actual increased risk from climate change.

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