Climate Change and Homeowners’ Insurance Are on a Collision Course
As escalating catastrophes take a toll on profitability, insurance companies are getting better at looking forward. The results aren’t pretty.
Fire burns over a ridge behind houses in Sonoma County, California, in September 2020.
Photographer: Philip Pacheco/BloombergA summer that has already seen water crises and wildfire smoke is rapidly becoming an inflection point in the pitched battle between climate change and the price of homeowners' insurance in the US.
American International Group Inc., which has already pulled back from new California business, is now set to curb home-insurance sales for affluent customers in around 200 ZIP codes across the US, including New York, Delaware, Florida, Colorado, Montana, Idaho and Wyoming. The decision was first reported in the Wall Street Journal on Thursday, citing people familiar with the company’s plans.