Democratic Party-led Senate Budget Committee hearing Wednesday pressed on with the narrative that climate change is one of the leading causes of unaffordable homeowners insurance rates and canceled coverage. [emphasis, links added]
Committee Chair Sen. Sheldon Whitehouse, D-R.I., took the narrative a step further to suggest that the climate-driven financial problems in the insurance industry are driving economic problems for the entire nation.
“This isn’t all that complicated. Climate risk makes things uninsurable. No insurance makes things unmortgageable. No mortgages crashes the property markets. Crashed property markets trash the economy,” Whitehouse said in his opening remarks.
However, one witness and a few senators pushed back against the unproven narrative.
Dr. EJ Antoni, a research fellow with the Heritage Foundation, testified that there’s no empirical evidence to support the claim that increases in the frequency and intensity of storms are driving the increased cost of insurance.
He argued that the primary drivers of [increased rates] and canceled insurance policies are inflation, lawlessness in large cities, and people building more expensive homes in high-risk areas.
“The widespread rioting caused by groups like BLM and Antifa in 2020 caused $100 billion in damages — a massive financial loss for the insurance industry. Likewise, general lawlessness in American cities over the last several years, and the refusal of government authorities to protect private property has resulted in more damages, more claims, and ultimately, higher premiums,” Antoni said.
Data and Science
Whitehouse referred to a New York Times article that blamed climate change for the insurance industry losing money on homeowners coverage in 18 states last year, many of them in the West and Midwest.
Whitehouse said this shows that hail, wind storms, and wildfires are now rivaling earthquakes and hurricanes as the most “prevalent perils.” That article focused on correlation, but not causation.
The Rhode Island senator cited the “Billion-Dollar Disaster” tally of the National Oceanic and Atmospheric Administration (NOAA) to show trends in extreme weather events are increasing.
New research by Dr. Roger Pielke Jr., a science-policy researcher at the University of Colorado Boulder, discovered numerous flaws in NOAA’s methodology.
Namely, no discernible trends in extreme weather trends can be detected with trends in disaster costs over time, the study finds, and when this data factors in changes in the amount of impacted development over time, there’s no increased trend in disaster costs.
Chris Martz, a meteorology senior at Millersville University and intern for the Committee for a Constructive Tomorrow (CFACT), published a report this week that uses NOAA’s weather data to show there are no trends in hail or wind storms.
NOAA’s Storm Prediction Center (SPC) keeps detailed records on various weather events, including hail, Martz explained.
Since 2010, the number of annual reported hail events, according to the SPC, has actually decreased by 2,340 reports per decade.
Martz noted several limitations in the data, which may result in changes in the future, but says that currently there’s no indication that hail events are increasing in the United States.
In its latest scientific assessment report, the Intergovernmental Panel on Climate Change, a United Nations consortium of the world’s leading climate scientists, finds no projected increase in hail or severe wind storm frequency or intensity, even under the most extreme, implausible emission scenario.
Real Problems
Insurance companies are facing real financial problems in the homeowners’ markets.
[This] was the 19th hearing on the topic of climate change, while much bigger problems, such as the “exploding” $34 trillion debt” continue to grow.
“They remain very profitable on things like car insurance and life insurance policies. But year after year, it is true that insurance companies are losing billions of dollars on homeowners insurance, especially in areas that are at high risk along the coast,” Martz told Just the News. “But the reason that this damage is increasing is not because there’s been an increase in hailstorms.” …
While no one disputed the existence of the problems in the insurance industry, many others tried to draw attention to regulatory compliance costs and inflation instead of blaming “climate change.”
Ranking Member Sen. Chuck Grassley, R-Iowa, said that it was the 19th hearing on the topic of climate change, while much bigger problems, such as the “exploding” $34 trillion debt” continue to grow. …
Sen. Ron Johnson, R-Wis., said that the premise of the hearing — climate change — was “completely off.”
He went over the other contributing factors to the financial problems in the insurance industry — inflation, regulatory barriers, riots and lawlessness, and high costs of insuring properties in high-risk areas — and asked Antoni from the Heritage Foundation to estimate the percentage of each of these factors contribute to the problem.
Antoni answered that since these factors arise out of government actions, it’s hard to separate them, but he estimated about 90% of the increased insurance premiums over the last several years were attributed to a failure to respond to criminal activity, regulatory costs, and inflation.
Inflation, he noted, was responsible for about 75% of the increased costs. …
Climate Risks
Others were, however, insistent that the insurance problems needed to be fixed by reducing carbon dioxide emissions.
Sen. Chris Van Hollen, D-Md., equated those disputing that trends in extreme weather were causing higher insurance premiums with those denying manmade global warming altogether.
“There are a lot of folks out there who still deny that climate change is real, and the impacts on the human component. I’ve always believed that when skeptics began to feel the impact in their pocketbooks, it would become more real,” Van Hollen said.
Van Hollen said that Swiss Re, a major global insurer, had done studies that concluded that the “growing risk from climate is the predominant factor in what they predict will be increasing costs due to climate risks.”
In fact, that is not what the study Van Hollen cited said.
Swiss RE research says that “To date, the main drivers of rising economic losses have been growth, urbanization, and associated asset value creation: there are more assets that need to be insured… Currently, climate change plays a relatively small role but we expect its associated losses will contribute more to economic losses in the future.” …
Martz said that it’s common for the industry to make indirect statements about the connection between climate change and insurance rates, and he believes that’s because they know the data to support the claim is weak.
“If they actually came out explicitly stating that climate change is causing insurance rates to rise, they would probably get big accusations of fraud. And that would be like a whole legal battle,” Martz said.
Read full post at Just The News
Antoni stated that 75% of the increased insurance costs were due to inflation. Much of this comes from the action of the Democrats. A large part of the deficit spending is funded by just printing more money which is a big driver of inflation. The many billions of dollars being spent to address anthropological climate change is a total waste because it is fake problem. However, action on climate change has caused the price of energy to go up, which adds more to inflation. Energy is needed for bring us all goods, so those prices go up. Action by the Democrats is causing more inflation which is driving insurance rates up, yet in their typical style, they are blaming climate change.
I’m addressing the portion of the increased cost due to lawlessness. This is another example of liberals causing a problem then putting the blame on something they don’t like. It was obvious in many cases that the city officials sympathized with the rioters. If for that reason or others it was one of the worst periods in our history of failing to stop the criminals. It wasn’t just a matter of enforcement. There were countless cases of the DA’s having solid cases for serious crimes but they declined to prosecute. Again, the likely motivation was sympathizing with the rioters. Added to all of this, the liberals in many areas moved to defund the police, putting property and lives at greater risk. These are real reasons for greater property loss which drives up insurance rates. Consider this against the climate change narrative that runs contrary to data that extreme weather events are increasing.
“Inflation, he noted, was responsible for about 75% of the increased costs. …”
Saw a meme a couple of days ago: man walking out of a store, “Hey, I can carry $100’s worth of groceries in one hand.”
Residential fire insurance payouts are based on replacement cost. Let’s say you have a 16′ x 24′ one room cabin, built during the special homesteading “5 acre parcels” days in southern California. Replacement? Guesstimate: $50,000. However, the county building code has been changed. The minimum square footage for any ‘new’ construction is about 750 sq. ft. A higher figure, about $140,000, is what the insurance companies are basing their premiums. “Thanks” County Government….. (And no, the insurance company doesn’t just give you a check. For practical purposes they supervise the replacement dwelling’s construction.)
If an elderly couple died in a fire, and the will beneficiaries plan on selling the property “as is”, no dwelling replacement, who gets the insurance payout, if anybody? (Is there a lawyer in the house?)
The ever increasing cost of regulations is definitely a problem. I own acreage in Eastern Oregon with a modern house and one built in 1890. Initially the older house didn’t have electricity and later this was added following the best practices of the time. A storm cut the power right at the point it entered the old house. The power company wouldn’t reconnect it unless I signed an agreement to completely rewire the old house and have it inspected to modern code. That would have been thousands of dollars for a house that hadn’t been occupied for 31 years and probably wasn’t going to be lived in again. I’m confident I could have won a law suit but power from the old house went to the well which provided water to the new house and a neighbor so I couldn’t have the delay of a law suit. I ran power to the well from the new house at a fraction of time and expense that a law suit would have taken.
This example showed the problem of regulators which are becoming more and more obstructive. The desire to control every detail of our lives is one of the motivations driving the climate change movement. They want to control what we drive, how much we drive, and what we eat. The world economic form wants to control where we live, how many square feet of living space we have, and how many clothes we buy. These little dictators are convinced they know what is right, and are determined to force it on everyone else.
It seems the Stupid Jackass Party wants to blame everything on Global Warming/Climate Change just like the Eco-Freaks from Greenpeace and the NRDC as well as EDF and Friends of the Earth since their all run by total Idiots