Insurers Exclude Climate Risks from Home Policies Amid Growing Threats

Major insurers in the United States, including Allstate, American Family, Nationwide, Erie Insurance Group, and Berkshire Hathaway, are reducing coverage for homeowners in areas vulnerable to natural disasters due to extreme weather patterns caused by climate change. These insurers are excluding protections from hurricanes, wind, and hail, raising premiums and deductibles, and even dropping existing policies in some regions. The trend is driven by escalating claims costs and the need to manage risk concentration. While insurers argue that these policy changes are necessary for the survival of the wider insurance market, it leaves homeowners in disaster-prone areas without crucial insurance protections. State-backed policies of last resort are also facing climate risks as insurance companies withdraw from high-risk regions.