Climate Crisis And Insurance in Louisiana: Beyond The Last Resort

Until recently, climate change played a minimal role in the property insurance sector. Times have changed. In the past, insurance premiums increased as repair and rebuilding costs rose, but those hikes are insignificant compared to the massive jumps policyholders face today. Property and casualty losses from natural hazards are rapidly increasing. Last year, homeowners insurance claims exceeded collected premium revenues in eighteen states. Accounting for climate risks has dramatically increased the cost of property insurance. Yet the questions of how to adequately prepare, adapt, and evaluate future climate hazards in our existing financial and risk transfer markets only lead to more questions: How will we deal with the increasing costs of transferring the risk of casualty loss? How will people be able to obtain and afford insurance for these increasing hazards? Will the government continue to subsidize risk reduction and disaster recovery, and if so, how will that be done? Can these challenges be addressed on a state-by-state basis, or have we reached the point where it requires federal intervention?

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