Are climate change and insurance related?
The answer is yes, and it boils down to economic resilience
When people hear Commissioner Kreidler talk about climate change, they often ask how it relates to insurance. Here’s the nexus: Insurance companies must be prepared to pay more frequent and costly property, life, and health insurance claims resulting from a changing climate. And consumers need to be aware of their risks in order to be economically resilient if they are struck by a climate event or disaster.
Here’s the most obvious example for people in Washington state. The changing climate is leading to more wildfires. The 2015 wildfire season was the largest in our state’s history, burning more than 1 million acres and costing more than $253 million in losses. In 2016, nearly 294,000 acres burned in Washington state.
Wildfires can cause property damage that can result in home and auto claims — the catastrophic Camp fire in Northern California in 2018 caused $16.5 billion in damage. Wildfire smoke also causes or exacerbates health conditions, which can result in more people needing medical attention and increased medical claims.
In addition, areas that have been struck by wildfire are more prone to landslides and floods because of the loss of vegetation. Landslides and floods can cause property damage, but many people don’t know they need flood insurance in order to be covered for those losses.
Commissioner Kreidler works with insurance companies in Washington state, nationally and internationally to ensure they are prepared for these increases.
This video explains Commissioner Kreidler’s work on climate change and insurance.
Thinking about climate change can be overwhelming. There’s a really easy first step to taking action: Talk about climate change.
Read more about how Washingtonians can prepare for climate risk through their insurance and other ways to prepare at www.insurance.wa.gov/climate.