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Climate Change and the Crisis of Affordable, Available Homeowner Insurance

Kenneth Klein

Supporting people who are most vulnerable to the impacts of climate change is one of the goals of the COP 26 UN Climate Change Conference, due to take place In Glasgow, UK, Oct. 31 to Nov. 12.

Coinciding with this world event, California Western Professor Kenneth Klein has recently had an article published in the Arizona Law Review [Vol. 63:1] that addresses the problem of affordability and availability of homeowner insurance in a world impacted by climate change.

A natural disaster survivor, Professor Klein was reappointed as a National Association of Insurance Commissioners (NAIC) Consumer Liaison Representative for 2021 and is a recognized expert in the intersection of homeowner insurance and natural disasters.

“The effects of climate change are a reality,” says Professor Klein. “A growing number of climate change survivors are facing skyrocketing home insurance premiums or unable to get coverage at all. My article provides real-world policy solutions to address this growing problem.”

The article, Ashes to Ashes: A Way Home for Climate Change Survivors, builds on recent proposals from regulators and prominent academics to solve the problem of affordability and availability of homeowner insurance.

The article provides a novel solution: first, establish a requirement that an insurer who offers homeowner hazard insurance anywhere in a state must offer it everywhere. Second, adopt state rules providing that rate filings or form filings for homeowner hazard insurance will not be approved if the insurance would exclude any natural disaster peril. Third, adopt state rules providing that rate filings for homeowner hazard insurance will not be approved if the insurance discriminates against homes based on the location of the home.

With a nod to upcoming COP 26, Professor Klein states, “There will be concern about the political headwinds that this three-point proposal may face. Natural disasters affect people and communities differently. The cost of insurance breaks differently amongst different communities. These differences can create political tensions that regulators and legislators must anticipate and navigate.”

“This article’s proposal cannot solve that political conundrum,” continues Professor Klein. “It simply says that if building codes and zoning codes determine that homes can exist in a location, then here is a method to insure those homes in an adequate way. And it is a way to make sure that climate change survivors can get back home if politicians wish to support that choice.”

Read Professor Klein’s article, Ashes to Ashes: A Way Home for Climate Change Survivors, here.