A structure damaged by Hurricane Helene in Old Fort, North Carolina, in fall 2024. Many residents affected through the state lacked flood insurance. Photo: NCDOTcommunications via Flickr Creative Commons (CC BY 2.0)

TipSheet: Is Climate Disaster Insurance a Worsening Disaster?

By Joseph A. Davis

When Hurricane Helene inundated and wiped out large swaths of North Carolina and Tennessee in 2024, in some counties fewer than 2% of residents had flood insurance. Today, many still have not recovered.

Climate disasters are getting worse. It’s not just floods. The 2018 Camp Fire in California destroyed pretty much the entire town of Paradise.

Both climate hazards and homeowners’ insurance vary by state. And environmental journalists will be doing their audiences a favor by explaining how home insurance is not keeping up with climate heating. 

Why it matters

Most people are lucky if they even own a home. Or their mortgage bank does. Renters are at risk from disasters, too. 

Losing your home means months of displacement — if you are lucky. Some disaster victims lose their retirement nest egg as well because their home constitutes most of their wealth. It can be a multigenerational disaster.

This has been going on for a long while (you may not remember the Great Mississippi Flood of 1927). What’s changed today is the climate — and the progressive infill of fire-prone areas by residential and commercial development.

The frequency of billion-dollar

weather disasters has been

going up in recent decades.

The actuaries know. The frequency of billion-dollar weather disasters has been going up in recent decades. We know this because the National Oceanic and Atmospheric Administration keeps a list.

Oh no … Wait! The Trump 2.0 administration ordered NOAA to discontinue the list. They don’t want us to see it. 

Good thing the science-based nonprofit Climate Central is still publishing it.

The backstory

We in the news business are good at making news headlines out of disasters. Among our five W’s is “who’s to blame?” 

After we have blamed the deep-pocketed power companies for their downed wires starting wildfires, … and the oil and gas companies for fueling our planet-warming gas cars, … we are quick to blame the insurance companies. 

They raise rates to keep up with the burgeoning disasters we are presenting them with. Our reaction: How dare they?

But disaster insurance

has been a disaster

for quite some time.

But disaster insurance has been a disaster for quite some time. And, yes, insurance companies have been doing a lot to make things worse. Raising rates, denying claims and coverage, etc. 

Flood insurance has been so bad for so long that Congress created the National Flood Insurance Program under the Federal Emergency Management Agency. But FEMA has performed poorly as well, and Congress has been flummoxed about how to fix it. 

SEJournal has reported on this many times before (e.g., here and here). 

Ultimately, though, the main problem is that buyers are not paying enough for insurance to offset the huge and growing damages.

But insurance companies do bear some blame and could do more to help. Insurance is regulated mostly at the state level. And climate hazards do vary state-by-state.

Every state has an agency that regulates insurance companies, typically called a “commission” or some such. Insurance rules are often technical and boring. But environmental journalists may discover that it is part of their job to explain what matters in an engaging way. 

Story ideas

• Find your state’s insurance regulatory commission on this list from the National Association of Insurance Commissioners (see below). Call it up and try to talk to a commissioner or PIO. Ask them to explain climate disaster impacts engagingly.
• What are the likeliest climate disaster risks in your state (e.g., in California, you might say wildfires)? Ask your commission what special problems your state encounters from that family of risks. And how they are trying/planning to address them.
• How many people in your state have flood insurance — either private or through the federal flood insurance program? Do state rules make it harder or easier for people to get flood insurance?
• Are homeowners’ policies in your state required to include fire insurance? Does this include wildfire insurance and whole-home loss? How much do they have to cover? Whole-home value? Incidental expenses?
• Can farmers in your state get insurance to cover crop loss from disasters other than floods or fire? How about drought caused by climate? Who covers it, and how much is covered? How much do farmers get paid?
• Is climate-related drought a risk for farmers in your area? Talk to the Agriculture Department’s Risk Management Agency about risks and any payouts in your state or area. You may get more help from the appropriate state or local agent. Check drought status at the National Integrated Drought Information System or the National Drought Mitigation Center.
• What about hail damage? Scientists recently found that climate change is bringing larger and more frequent hail. Hail damages roofs, homes and cars, as well as crops. What does your state say about hail insurance? Does it set a deductible? What deductible do claimants have to pay in your area? Is it worth filing a claim after the deductible?

Reporting resources

• National Association of Insurance Commissioners: The NAIC is the body that cares for the interests of state insurance commissions and their people.
• Insurance Information Institute: An industry-affiliated lobby group that often helps explain the hard-to-explain things about insurance.
• Insurance Journal: A publication for industry professionals that offers various periodicals — some regional or weekly and some available free to journalists. 
• Association of State Floodplain Managers: A group of professionals that tries to keep vulnerable properties out of the flood plain (a condition for federal insurance), but is informative when people fail to do so.
• United Policyholders: A nonprofit that represents the interests of policyholders, ranging beyond climate disaster coverage for homeowners.  
• Consumer Federation of America: A group representing the interests of consumers on many topics, but strong with consumer-friendly info on climate-related insurance.

[Editor’s Note: For more, read our Issue Backgrounder on the climate insurance meltdown and a recent Inside Story Q&A with award-winning reporters who covered failed insurance and other systems after Hurricane Ian and the Maui fires. Plus, check out related Reporter’s Toolboxes on realty risk data and climate risk data; TipSheets on property risk disclosure, flood risk for homebuyers, home insurance and climate, wildfire insurance, climate financial risks and climate disaster victims; as well as up-to-date headlines on insurance issues. Also, for extensive coverage of climate disaster-related issues, see our Topic on the Beat pages on disasters, climate change, wildfire and hurricanes.]

Joseph A. Davis is a freelance writer/editor in Washington, D.C. who has been writing about the environment since 1976. He writes SEJournal Online’s TipSheet, Reporter’s Toolbox and Issue Backgrounder, and curates SEJ’s weekday news headlines service EJToday and @EJTodayNews. Davis also directs SEJ’s Freedom of Information Project and writes the WatchDog opinion column.

* From the weekly news magazine SEJournal Online, Vol. 11, No. 23. Content from each new issue of SEJournal Online is available to the public via the SEJournal Online main page. Subscribe to the e-newsletter here. And see past issues of the SEJournal archived here.