During the August 28 edition of Fox News’ America’s Newsroom, Fox Business correspondent Max Gordon reported on the skyrocketing cost of car insurance, another one of the “big issues coming up in the campaign” according to anchor Dana Perino. Gordon went on to connect this pocketbook issue to climate change, noting that the, “Increase in severe weather events has been one of the main drivers behind these increasing premiums. Climate events that cause a billion dollars or more in damage have been steadily on the rise, impacting how insurers set rates.”
Notably, the climate crisis is creating a housing insurance crisis as well. Climate change is making storms and wildfires more destructive. Last year, the U.S. experienced a record 28 disasters that cost more than a billion dollars each in damage. In response, some private insurers are raising premiums in areas frequently hit by extreme weather or pulling out of high-risk areas altogether, leaving homeowners uninsured.
Rising insurance costs are not the only economic impact of climate change. A study released early this year found that climate change is among the factors driving inflation which is “driving up the prices of food and other goods worldwide.” As Axios reported: “This is not the first study to note the economic toll of climate change, or even the inflationary pressures of increasing temperatures and extreme weather events.”
DANA PERINO (ANCHOR): We've been talking about all these big issues coming up in the campaign. Housing is one. Here is another one: The cost of car insurance is crushing drivers. Rates have spiked since President Biden took office, and they’re projected to surge even more this year. Fox Business' Max Gordon is live from Los Angeles with an explanation as to what is going on.
MAX GORDON (FOX BUSINESS CORRESPONDENT): Hey there Dana. Well, here in California, car insurance rates are expected to jump by more than 50% by the end of the year. It’s one of three states who are going to be seeing that. That’s also happening in Missouri and Minnesota. The big reason for this — well, it's natural disasters. Severe weather. That's all according to a study from Insurify. That’s a company that provides information about the insurance market. The average cost of full coverage in the U.S. rose by 15% in the first half of this year. And that number is expected to hit 22% by the end of this year. The report says that increase in severe weather events has been one of the main drivers behind these increasing premiums. Climate events that cause a billion dollars or more in damage have been steadily on the rise, impacting how insurers set rates. Hail-related claims were up to 11.8% of all comprehensive claims in 2023, according to the report, a 2.8% increase since 2020. Vehicle maintenance and repair costs have also increased by around 38% over the past five years, according to federal figures. These higher repair costs have led to more expensive claims, with insurance companies passing the cost to consumers in the way of higher premiums.
