U.S. PIRG’s comment on Federal Insurance Office (FIO) climate-related data collection plan

U.S. PIRG submitted supportive comments and recommendations for a proposed FIO plan to collect data to assess the impact of climate change on the availability and affordability of homeowners insurance.

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Our letter highlighted the following financial risks that climate change poses to policyholders of homeowners insurance:

  • Severe weather stoked by climate change could result in property owners’ deaths, injuries, property loss, property damage or diminished property values. 
  • Insurance companies could then, as they often do, hike premiums to pass on the higher costs of claims to their customers, tightening household budgets and freezing more people out of the market entirely. 
  • Those who have insurance could lose it altogether. 

Among our recommendations were the following:

  • Accessibility of data for research purposes: The data collected by FIO should be made available in disaggregated form so researchers can analyze it for impacts and trends.
  • Management of climate-related financial risks: FIO should urge state insurance regulators to require insurers to manage climate-related risks by reducing or ending their underwriting of and investments in new fossil fuel projects. By underwriting fossil fuel-related projects, many insurance companies are perpetuating processes that lead to climate change and its related weather events.4 In turn, those disasters lead to rising premiums,5 not only for their own customers but those of other insurance companies too. 
  • Assessment of risks to small businesses: FIO should also look at impacts on commercial multi-peril insurance for businesses. Small businesses face many of the same risks as insurers’ home-owning customers. Climate change-related weather events put properties at risk, increase the costs of claims and increase the likelihood of premium hikes for business customers as well.6  

Mike Litt

Director, Consumer Campaign, PIRG

Mike directs U.S. PIRG’s national campaign to protect consumers on Wall Street and in the financial marketplace by defending the Consumer Financial Protection Bureau, and works for stronger privacy protections and corporate accountability in the wake of the Equifax data breach. Mike lives in Washington, D.C.