Two insurance regulators are joining forces to take an unprecedented step to survey property insurance markets across the United States – which has never been collected to this degree at the national level. Their hope is to better understand how climate change and extreme weather affects policy premiums and coverage options.
Though, while the move is being met with open arms by industry stakeholders, policymakers are demanding that the data be made available to the public.
Groups ranging from insurance policymakers and academics to the Consumer Federation of America have penned several letters asking the National Association of Insurance Commissioners and the Federal Insurance Office to make the homeowners insurance data public, so they can use it to inform decisions on the state and ZIP code level.
That, and the groups are asking for clarification – like, which states won’t be participating in the data call and why data from 2023 isn’t being included. Participation is completely voluntary.
“Insurance is unique amongst just about every financial product in that it's almost exclusively regulated at the state and territorial level,” said Dave Jones, the director of the climate risk initiative at UC Berkeley’s Center for Law, Energy and the Environment. Jones also served two terms as California’s Insurance Commissioner.
Jones said this data is crucial to bridge the gap between the climate and housing affordability crises and urges transparency so experts can work on solutions.
“We're marching steadily towards an uninsurable future in regards to this country. '' Jones said. “If we want to avoid that future, we've got to accelerate the transition away from utilization of fossil fuels, not just in this country, but throughout the globe.”
The decision to gather the data was made back in March. Currently, the data will span from 2018 through 2022. However, lots of insurance premium spikes, non-renewals, and cancellations happened during the 2023 fiscal year. In 2021, President Joe Biden issued an executive order to find solutions to climate-related financial risks.
In fact, the U.S. property/casualty industry recorded a $21.2 billion net underwriting loss last year.
Here in New Mexico, data scientists are seeing increasing wildfire risk in areas like Lea County. In the next 30 years, models from the non-profit First Street Foundation predict southeastern New Mexico could see an 82.6% increase in structures destroyed by wildfire annually.
Across the country, this rise in insurance premiums has pushed some homeowners to use state insurers of last resort, better known as FAIR or fair access to insurance requirements. These plans are typically more expensive, and have been widely considered to be economically unfeasible thanks to rising policy counts.
For the states that are participating in the data call, the deadline to submit is June 6th. The NAIC and FIO have yet to respond to the requests for transparency.
