America Adapts the Climate Change Podcast House of Cards: Florida and Property Insurance in the Age of Climate Change
In episode 210 of America Adapts, Dr. Carolyn Kousky, Associate Vice President for Economics and Policy at the Environmental Defense Fund, returns to discuss the climate challenges in Florida's property insurance market. She outlines how Florida faces significant economic risks due to hurricanes and other disasters, with 36 presidential disaster declarations since 2000. The episode delves into the complexities of the state's insurance system, focusing on three key programs: Citizens Property Insurance Corporation, the Florida Hurricane Catastrophe Fund, and the Florida Insurance Guarantee Association. Dr. Kousky addresses the reliance on smaller insurance companies; the critical role of reinsurance; and the impact of climate change on insurance pricing and availability. Doug and Carolyn have a broader conversation about the insanity of the Florida system of the existing property insurance market and how it could lead to price gouging for Florida citizens living in less at risk areas of the state. Also, the ‘hot take’ for this episode!
Topics covered:
- Evolution of Florida's Property Insurance Approach
- State Programs Providing Insurance in Florida
- The Role of Reinsurers and Insurance Companies
- Transparency in Catastrophe Modeling in Florida
- Impact of Sea Level Rise on Florida's Insurance Market
- Cross-subsidies and Assessments in Florida's Insurance Market
- Climate Equity and Fair Pricing in Florida's Insurance Market
- Balancing Risk Reduction and Insurance Access
- Price gouging inland communities to subsidize coastal communities’ insurance rates
- Guest Recommendation: Jessica Dandridge, Water Collaborative of Greater New Orleans
Transcript of episode available here. Quotes from the episode:
Dr. Carolyn Kousky:
Politically, there's often an appetite to just ignore the risk and not address it because addressing it can be hard and might be costly, but failing to address it is also setting us up for much higher future costs.
…we need to view the crisis in our insurance markets as a signal for how high risk is, and that we have to invest aggressively and quickly in much more climate adaptation in order to lower that risk to a manageable level…
Doug Parsons:
Climate change is like gravity. … there's no arguing with it. It's just going to happen. …but you are living in Gainesville, you're being responsible, you haven't gone to the coast. Isn't raising that person's rate a form of price gouging because you don't have as much risk and yet they're raising your rate , that's price gouging.
Previous Episodes with Dr. Carolyn Kousky
New Tools for a More Resilient Future with Dr. Carolyn Kousky
Risky Business: Adapting Insurance Markets to Wildfire and Flood Risk with Dr. Carolyn Kousky
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Links in this episode:
The Evolution of Florida’s Public-Private Approach to Property Insurance https://floridapolicyproject.com/wp-content/uploads/2024/05/FINAL_Florida-Insurance-Market-Report.pdf
https://earth.org/why-we-need-to-fix-disaster-insurance-markets/
https://www.edf.org/people/carolyn-kousky
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