Representative Byron Donalds said part of the reason Florida insurance premiums are rising is because European reinsurance companies are factoring climate change risk into the cost.
Newsweek reached out to Donalds’ press office by email for comment.
Why It Matters
In 2024, there were 27 individual weather and climate disasters inflicting at least $1 billion in damages, according to the National Oceanic and Atmospheric Administration’s (NOAA) National Centers for Environmental Information (NCEI).
As climate disasters have increased in recent years, home insurance companies have had to raise premiums. A study by the National Bureau of Economic Research found that average premiums increased by 33 percent between 2020 and 2023, and they are only going to continue rising, ramping up costs for homeowners.
What To Know
Donalds, a Florida Republican, was interviewed on a recent episode of Rich Valdés’ America At Night. Among other things, they discussed the worsening insurance market in Florida.
“In Florida, it’s a real problem,” Donalds said. “Premiums continue to go up year after year after year.”
Donalds said one of the reasons driving the rising insurance premiums is European reinsurance companies are “trying to price in climate change risk.”
Donalds added that climate change risk is “impossible to quantify” but has found its way into insurance premium calculations anyway.
“It’s a big problem,” he said. “A lot of people have to come to the table on this, a lot of work needs to be done.”
University of Arizona geography professor Beth Tellman, the chief scientist and co-founder of Floodbase, told Newsweek that all insurance companies are pricing in climate change risk to their premiums, not just European companies. It’s a necessary action if insurance companies want to stay financially solvent, she said.
“All insurance companies want and need to do it for their own financial stability,” Tellman said. “It’s not just reinsurance companies in Florida.”
What People Are Saying
Representative Byron Donalds in an interview with Rich Valdés: “Basically, in every economy you need a lot of insurance carriers that will come in and write policy. Then, through the economic engine, you will achieve price stability because different carriers will compete for the business.
“In Florida, what’s really hurt us for a long time is we haven’t had enough carriers for our state.”
University of Arizona geography professor Beth Tellman told Newsweek: “Climate change is definitely increasing the cost of insurance, and it will continue to do that for every risk. However, it’s not optional for insurance companies to price it in or not if they want to stay financially solvent. Insurance companies that ignore climate risk will fold.”
What Happens Next
As climate change continues to intensify natural disasters across the nation, insurance premiums are bound to continue rising. Tellman said the best way to bring insurance costs down is to enforce better building codes, zoning and “reducing exposure in the first place.”
“Investment in risk mitigation is the biggest way to drive down cost of insurance,” she said. “Unfortunately, climate change will make things more expensive.”
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