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News

Relentless Catastrophes Push Insurance Industry To Change

Law360

  • January 28, 2022

Devastating weather disasters in 2021 have spurred insurers, policyholder advocates and state regulators to take a hard look at the way risk is calculated in vulnerable regions and at what steps must be taken to make insured properties more resilient as climate change alters the industry's landscape.

Recent reports show that the costs from natural disasters in the U.S. continue to climb to new highs each year, with some estimates pegging the insured damage at somewhere between $120 billion and $145 billion. Experts told Law360 that they're expecting major industry changes in response, including potential shifts in the way risk is calculated by insurers and possibly cutting vulnerable policyholders off from desperately needed coverage.

. . .

Dennis Artese of Anderson Kill PC said he expects to see the insurance industry start to incorporate more climate change-specific exclusions in property policies, "just when policyholders need the coverage the most."

Beyond first-party property coverage, there is a growing number of liability claims tied to climate change, with more than 1,000 climate change-related suits, said Artese, who represents policyholders. More than a dozen of these suits have been filed by local municipalities and states for damages they say stem from climate change.

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