Senate Democrats are demanding that insurers tell them which places could be next.
Damage to Cedar Key, Fla., after Hurricane Idalia in August.Credit…Paul Ratje for The NY Times
By Christopher Flavelle, New York Times, Nov. 1, 2023
Faced with growing losses from hurricanes, floods, and wildfires, major insurance companies are pulling out of California, Florida, and Louisiana — a shift that threatens to undermine the economies of those states.
Now Senate Democrats are demanding that insurers tell them which places could be next.
On Wednesday, the Senate Budget Committee sent letters to 40 insurance companies, seeking documents that show where in the country those insurers have begun dropping customers, or are considering it. The committee, which has subpoena power, has given the companies until Nov. 17 to respond.
“Climate-caused uninsurability has the potential to trigger cascading failures that undermine our entire economy,” Senator Sheldon Whitehouse, Democrat of Rhode Island and the committee chairman said in a statement. “With this investigation, we are seeking information about where the dominoes may fall next.”
Banks typically require insurance when writing a mortgage. If insurance becomes unavailable in a particular community, it becomes hard for most potential buyers to purchase a home, leading to a drop in real estate values.
Mr. Whitehouse compared the accelerating withdrawal of insurance companies with the 2008 housing crash, saying a broad insurer pullback “will have similarly grave economic effects.”
He said the investigation aims to give the public “advance warning” if insurers might leave their communities.
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