If you’re one of many people reeling at how quickly your insurance bills are rising, don’t just blame inflation—blame climate change. 

The growing impact of climate change is a major factor in why insurance bills have been soaring lately, researchers and industry insiders say. Climate change is making storms, floods, and wildfires more frequent and severe. While the loss of lives is the most severe consequence of these events, there are financial costs as well.

For example, insurance companies have to pay out more claims—costs that are ultimately passed on to consumers one way or another. Inflation, plus climate change costs, have raised premiums for car insurance 19% over the last year according to government data, and pushed homeowner’s insurance premiums up 21% between May 2022 and 2023, according to an analysis by Policygenius.

“There are two things that drive insurance loss costs, which is the frequency of events and how much they cost,” said Robert Passmore, assistant vice president of personal lines at the Property Casualty Insurers Association of America. “So, as these events become more frequent, that’s definitely going to have an impact.”

To be sure, it’s difficult to put an exact price tag on climate change since no one knows with certainty whether any single hurricane or fire would have happened if not for global warming, or exactly how much worse it was because of climate change. Economists tend to think of it in terms of probability: What’s the statistical chance that any given storm or heat wave was caused by climate change?

Research suggests the number is high, and getting higher. A 2021 report by the United Nations’ World Meteorological Organization found that out of 77 extreme weather events between 2015 and 2017, 62 had “significant human influence.”

A more conservative estimate, chalking up 50% of natural disaster damage to climate change, would cost many billions of dollars. In the U.S., there have been 25 climate and weather disasters costing at least $1 billion so far in 2023, according to the National Oceanic and Atmospheric Administration.

Natural disasters have already pushed the insurance business to the point of crisis in disaster-prone states.

Earlier this year, insurance giants State Farm and Allstate (ALL) stopped issuing new homeowners policies in California, saying the state wouldn’t allow them to raise rates enough to compensate for elevated wildfire risk. The move was imitated earlier this year by smaller firms Merastar Insurance Company, Unitrin Auto and Home Insurance Company, Unitrin Direct Property and Casualty Company, and Kemper Independence Insurance Company, according to reports. 

AAA, Farmers, and several other insurance companies have reportedly pulled out of Florida. (It’s not just natural disasters though—the Insurance Information Institute blames the Florida crisis on a spate of fraudulent roof-repair schemes that’s driven up litigation costs.)

In both states, homeowners no longer able to get normal insurance have had to turn to state-run programs that serve as “insurers of last resort.” California’s option charges more and provides less coverage than private options.

Indeed, the extent of insurance premium increases varies widely by state. Florida homeowners had their premiums rise by 35% in 2023, while those in Vermont only rose 10% according to Policygenius. 

Even if you don’t live in a state that’s been hit by a major natural disaster lately, you still might end up paying for it. Reinsurance companies, the companies that insure insurance companies against losses, spread out the costs of paying for disasters.

“If the reinsurance company has a huge loss in California, they’re going to recoup that loss by upping everybody else’s reinsurance in other high-risk areas,” said Jesse M. Keenan, a professor of real estate and urban planning at Tulane University, an expert on climate change’s effects on the housing market.