Why Climate Change Is Driving An Insurance Meltdown

Summary

Summary of "What a Day" Episode: Why Climate Change Is Driving An Insurance Meltdown

Release Date: June 11, 2025
Host: Jane Coaston
Guest: Anya Zolajowski, Crooked Media Climate Correspondent

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Introduction

In this episode of What a Day, host Jane Coaston delves into the intricate relationship between climate change and the burgeoning crisis in the home insurance industry. Highlighting the dire situation in California and its ripple effects across the United States, the episode unpacks how increasingly frequent and severe natural disasters are straining insurance companies to their limits.

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The Crisis in California

The episode opens with a stark observation about California's insurance landscape. Jane Coaston mentions, "When natural disasters happen over and over again, like with wildfires in California, home insurance companies get overwhelmed" (01:19). Anya Zolajowski corroborates this by stating that since 2022, "seven of the top 12 insurers in the state have stopped renewing and writing policies in high-risk zip codes," further noting that "44% of all US homes are in areas that face at least one severe or extreme climate risk" (01:19).

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Nationwide Climate Risks

Jane emphasizes that California's predicament is a microcosm of a broader national issue. She explains, "folks in North Carolina dealing with hurricanes and floods or people in Iowa and Oklahoma recovering from tornadoes" are all grappling with similar insurance challenges, all exacerbated by climate change (01:39).

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Personal Stories: Callum Hanlon's Experience

To humanize the crisis, Jane recounts her conversation with Callum Hanlon, a 37-year-old resident who, along with his family, escaped the wildfires in Altadena. Callum shares the harrowing experience: "When I went outside to go get guests, the sky was just like ablaze... every house on our street had burned down" (03:09 - 03:45). The emotional toll is palpable as Callum expresses his fears about skyrocketing insurance rates and the uncertainty of coverage post-disaster.

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Expert Analysis: The Economic Impact

Anya Zolajowski brings in expert insights from Steve Koller, a postdoctoral fellow at Harvard, who highlights the direct link between climate-induced disasters and rising insurance premiums. "Climate crisis, natural disasters are leading to higher insurance premiums," Koller asserts (06:07). Furthermore, Jessica Morse, former Deputy Secretary at the California Natural Resources Agency, emphasizes the need for insurance companies to drive home hardening and weatherproofing initiatives to mitigate these risks (07:48).

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Potential Solutions and Policy Measures

Addressing the insurance meltdown requires systemic changes. Anya discusses the concept of "reinsurance," which acts as insurance for insurance companies. However, she points out that "those rates are also going up around the world." A proposed solution involves federal government intervention: "the federal government could actually take over reinsurance, offer it to insurance companies at a heavily discounted rate with the stipulation that insurance companies have to help their customers... make them more resistant to these natural disasters" (07:48).

Additionally, Anya introduces the idea of "climate Superfund laws," which place financial responsibility on major polluters. States like New York and Vermont have passed such legislation, requiring fossil fuel companies to "pay for the destruction that natural disasters and climate change cause," thereby funding climate resilience and adaptation efforts (09:39).

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The Role of Government and State Actions

California stands at the forefront of combating climate-related insurance challenges. Anya notes that "California wasn't asleep at the wheel," implementing measures like "forest and vegetation management, wildfire resilience" to counteract fire risks (08:57). However, she acknowledges the uphill battle posed by the unpredictable nature of climate change: "we're really in a race against climate change... we don't have a crystal ball" (08:57).

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Financial Market Implications

The financial ramifications of ignoring climate change are profound. Anya quotes a board member of Alliance, one of the world's largest insurance companies: "Capitalism as we know it ceases to be viable. And that's because insurance isn't just for our homes. You know, we use it for our vehicles... It underpins so much of how our financial markets function" (08:06). This underscores the systemic risk posed by climate change to the broader economy.

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Conclusion and Hope

Despite the grim outlook, there are glimmers of hope through state and local initiatives aimed at mitigating the impact of climate change on insurance and the economy. The episode concludes by highlighting successful legislative efforts and the potential for innovative policy solutions to drive resilience and adaptation, offering a path forward in an era increasingly defined by climate challenges.

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Notable Quotes

• Anya Zolajowski [01:19]: "44% of all US homes are in areas that face at least one severe or extreme climate risk."

• Callum Hanlon [03:09]: "Every house on our street had burned down."

• Steve Koller [06:07]: "Climate crisis, natural disasters are leading to higher insurance premiums."

• Jessica Morse [07:48]: "I don't think we're going to actually achieve home hardening... until we get insurance companies to be a driver of it."

• Board Member of Alliance [08:06]: "Capitalism as we know it ceases to be viable. And that's because insurance isn't just for our homes."

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Implications for Listeners

This episode serves as a critical wake-up call about the tangible financial impacts of climate change. For homeowners, policymakers, and stakeholders in the insurance industry, understanding these dynamics is essential for navigating the increasingly volatile landscape shaped by environmental upheavals.

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Further Listening

To gain more insights into the multifaceted impacts of climate change on society and the economy, listeners are encouraged to explore additional episodes of What a Day and related programs by Crooked Media.

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Produced by: Crooked Media
Host: Jane Coaston
Guest: Anya Zolajowski

Transcript

[Jane Coston]

It's Wednesday, June 11th. I'm Jane Coston, and this is what a Day. The show that learned that the Southern Baptist Convention, the nation's largest Protestant denomination, has called for the overturning of Obergefell v. Hodges, the Supreme Court case that legalized same sex marriage. In response, I am calling for every American to send me protein bars, ideally mint chocolate flavored. If we're just calling for things, I want to get my ass in. Early on today's show, thousands of military troops continue to occupy the streets of Los Angeles as people protest immigration raids. And President Donald Trump warns against protesting his big birthday parade. Oh, I mean, the 250th anniversary of the army celebration. But let's start with California. And yes, we know this week has been very west coast focused on what a day. We're basically a Tupac album right now. But stay with me because what happens in California often doesn't stay here. Case in home insurance. When natural disasters happen, home insurance is how folks are able to rebuild. But when natural disasters happen over and over again, like with wildfires in California, home insurance companies get overwhelmed. And in California and other states, some might even stop offering policies altogether. Here's CNBC.

[Anya Zolajowski]

Since 2022, seven of the top 12 insurers in the state have stopped renewing and writing policies in high risk zip codes. Other insurers have pulled out of the state entirely. And it's not just Californ who are facing severe climate risks. 44% of all US homes are in areas that face at least one severe or extreme climate risk.

[Jane Coston]

I am, to be clear, not America's biggest home insurance company, Stan. But I do know just how important it is to be able to get home insurance. And that goes not just for Californians being denied for living in high risk areas, but also for folks in North Carolina dealing with hurricanes and floods or people in Iowa and Oklahoma recovering from tornadoes, all of which are likely to get more common and more powerful as a result of climate change. So to talk about how climate change is going to make your life more expensive, I spoke to Crooked climate correspondent Anya Zolajowski. Anya, welcome back to what a Day.

[Anya Zolajowski]

Great to be here.

[Jane Coston]

So I'm excited to talk to you about some ways climate change is going to hit our wallets so hard. But before I do that, I want to do a gut check on the trend. Over the past two years, the northern hemisphere has had its two hottest summers since we started tracking them in the 1940s. Are we on track to break another record?

[Anya Zolajowski]

That's A great question. You know, it's too early to tell, but it's DEF 2025 is definitely rivaling the others, so, you know, we'll see. But wildfires are already spreading across Canada and it's not looking good.

[Jane Coston]

So let's get to the money in particular home insurance rates. I mean, I haven't lived in Los Angeles for very long and I experienced those huge fires earlier this year and. And you actually talked to someone who made it through the fires in Altadena but lost pretty much everything?

[Anya Zolajowski]

Yes. So that was Callum hanlon. He's a 37 year old and he had to flee with his wife, two dogs and their two kids from Altadena.

[Jane Coston]

When I went outside to go get guests, the sky was just like ablaze.

[Anya Zolajowski]

And I could see the.

[Jane Coston]

I don't, to be honest, I don't know if I could see the flames yet or just the orange glow at that point from Eaton. And I just ran back inside and told her, I think we have to leave now and what happened to them?

[Anya Zolajowski]

So the next morning they actually decided to leave LA and go to San Diego where they have relatives. On the way down, we stopped for.

[Jane Coston]

Breakfast and got a call from our neighbor that every house on our street had burned down.

[Anya Zolajowski]

This is a traumatic event, as you know. As you know, because you had, you were there and there's so much that they now have to figure out. One thing that he's definitely scared of is how his insurance rates are going to increase. Time will tell whether it'll actually cover the scale of the damage, but it is, it is a worry that they have. He told me he's quite terrified.

[Jane Coston]

Let's be real here. We do see fires and floods all the time, all across the country. What is the connection between climate change and rising insurance rates?

[Anya Zolajowski]

Just because we're seeing these floods and fires, you know, as this new normal, it doesn't mean that it's normal. You know, our systems as they exist right now, aren't actually equipped to handle them. And so as we see hotter temperatures and worsening natural disasters, we're going to see higher insurance rates because insurance companies are the ones who are helping us out or bailing us out, you know, when these homes are destroyed in these natural disasters. But as these costs go up, these companies can't actually afford to cover the scale of damage. You know, I took a look and the LA wildfires caused 54 billion worth in damage. You know, more than 11,000 homes were burned down. And so this is, you know, unprecedented territory. California's Biggest insurer, State Farm said it's a dire situation. They sought for approval to be able to raise rates by as much as 30% for homeowners. And that's if you can get insurance. A lot of people now are actually getting non renewal notifications because insurance companies are flat out saying if you're in a high risk zone, are not going to renew your policy. And even today there was a headline in Axios that shows that families of color end up being the most affected by this. So blacks, Latinos, families who just absolutely, you know, are in these more high risk homes who are going to get these non renewals. And the problem isn't just in la. You know, there was a report that found that insurance premiums have risen by 8.7% above inflation between 2018 and 2022. And that's you, largely due to climate change related disasters.

[Jane Coston]

You got to talk to Steve Koller, a postdoctoral fellow at Harvard who studies home insurance and climate. Can you tell me a little bit about what he said?

[Anya Zolajowski]

Yeah. So he has seen this link. You know, again, it's still early days. This is unprecedented. So we can't go straight into causation. However, he is saying they're noticing this trend, climate crisis, natural disasters are leading to higher insurance premiums. Of course it makes sense that we're seeing global temperatures rise, more extreme wildfires, hurricanes, intensities being at unprecedented levels and people are starting to feel it in.

[Jane Coston]

Their, in their pocketbooks. But the government, especially state governments, regulate insurance though, right? Like it's in everyone's interest to have it be possible to protect the places where people live. What can be done to shore up the industry?

[Anya Zolajowski]

Basically there's this thing known as reinsurance and so that's insurance for insurance companies. And those rates are also going up around the world. And so one idea is that the federal government could actually take over reinsurance, offer it to insurance companies at a heavily discounted rate with the stipulation that insurance companies have to help their customers, you know, fire harden their homes or weatherproof their homes, basically make them more resistant to these natural disasters. So Jessica Morse is the expert I spoke with and she's the former Deputy Secretary at the California Natural Resources Agency for forest and wildland resilience. I don't think we're going to actually achieve home hardening at the scale and neighborhood community hardening that we need to until we get insurance companies to be a driver of it.

[Jane Coston]

Now it's funny because we often hear that the right agrees that climate change is real. Sometimes but they just think that addressing it is too expensive. But how is not addressing climate change impacting financial markets? And how could it potentially impact financial markets moving forward?

[Anya Zolajowski]

Yeah, it's funny how climate denialism has kind of moved into, like, well, it exists, but it's too expensive or it's not a big deal. When I think, you know, we can't afford not to address it. I did save a quote from a board member of alliance, one of the world's biggest insurance companies, and quote, capitalism as we know it ceases to be viable. And that's because insurance isn't just for our homes. You know, we use it for our vehicles. It's everywhere. Businesses use insurance, like it underpins so much of how our financial markets function.

[Jane Coston]

I live in California, if people were not aware, and California is often in the lead when it comes to state environmental and climate action. What's California doing with or without the federal government?

[Anya Zolajowski]

As Jessica had put it, California wasn't asleep at the wheel. You know, they have been doing things to address fire risk. That includes forest and vegetation management, wildfire resilience, things like this. But we're really in a race against climate change. And so the winds this year, that was what the state wasn't prepared for. And so a lot is happening. But the hard part is being nimble, you know, so that you can actually respond to these worsening climate crises as they're happening when it's really hard to tell, like, we don't have a crystal ball.

[Jane Coston]

What are other states or anyone else doing that we should be optimistic about?

[Anya Zolajowski]

I mean, one thing that I've been really geeking out on is this idea of climate Superfund laws. So basically, they put the onus on the biggest emitters, so fossil fuel companies, to actually pay for the destruction that natural disasters and climate change cause. New York has passed such a bill. Vermont has. And the idea is that these companies have to actually pay a levy that then goes into this bucket that can then be used for climate resilience, climate adaptation, covering disaster, destruction, etc. So there's a lot going on. That's just one example, but I would definitely focus on state and local efforts right now for. For that sense of hope.

[Jane Coston]

Anya, as always, thank you so much for joining me.

[Anya Zolajowski]

Thank you so much for having me.

[Jane Coston]

That was my conversation with Crooked Climate correspondent Anya Zolajowski. This segment was sponsored by our nonprofit partner, Crooked Ideas. We'll get to more of the news in a moment, but if you like the show, make sure to subscribe. Leave a five star review on Apple Podcasts. Watch us on YouTube and share with your friends. More to come after some ads what a Day is brought to you by bookshop.org whether you're searching for an incisive history that helps you make sense of this moment, a novel that sweeps you away from this moment, or the perfect gift for a loved one, bookshop.org has you covered. When you purchase from bookshop.org, you're supporting more than 2,000 local independent bookstores across the country, ensuring they'll continue to foster culture, curiosity and a love of reading for generations to come. Big Bookshop.org has launched an ebook app. You can now support local independent bookstores even when you read digitally. Use code WAD at Checkout to get 10% off your next order at bookshop.org that's code wadookshop.org Building a business may feel like a big jump, but on deck small business loans can help keep you afloat. With lines of credit up to $100,000 and term loans up to 250,000, OnDeck lets you choose the loan that's right for your business. As a top rated online small business lender, OnDeck's team of loan advisors can help you find the right business loan.

[Anya Zolajowski]

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[Jane Coston]

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[Anya Zolajowski]

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[Jane Coston]

What else we're following today header lines Mr. Secretary, what's the justification for using.

[Anya Zolajowski]

The military for civilian law enforcement purposes in la?

[Jane Coston]

Why are you sending war fighters to cities to interact with civilians?

[Anya Zolajowski]

Every American citizen deserves to be live in a community that's safe and ICE agents need to be able to do their job. They're being attacked for doing their job, which is deporting illegal criminals.

[Jane Coston]

On Tuesday, Secretary of Defense Pete Higseth opened himself up to questioning from lawmakers for the first time since his swearing in in January, Higseth appeared before the House Appropriations Subcommittee to discuss the Department of Defense's 2026 budget. His testimony came on the heels of President Trump's decision to deploy 4800 National Guard members and Marines to Los Angeles, which, according to ABC News, is more troops than are in Iraq and Syria combined. The troops in LA are intended to respond to anti Immigration and Customs Enforcement protests. President Trump justified the deployment by citing a little use law, a specific section of Title 10 of the US Code on Armed services. During Tuesday's hearing, Democratic California Representative Pete Aguilar pushed Hegseth on that the legal basis that the president used cites three examples and circumstances for the invasion by a foreign nation. Rebellion or dangerous rebellion against the authority of the government of the United States, or the president is un for with regular forces to execute the laws of the United States. Which authority is triggered here to justify the use? I don't know. You just read it yourself and people can listen themselves. But it sounds like all three to me. The Pentagon estimated during Tuesday's hearing that it would cost $134 million to have federal forces in Los Angeles. That's despite Secretary Higseth not knowing exactly why they were allowed to be here. This is a record crowd.

[Anya Zolajowski]

You know, you never.

[Jane Coston]

You never had a crowd this big.

[Anya Zolajowski]

That's an honor.

[Jane Coston]

You think this crowd would have showed up for Biden?

[Anya Zolajowski]

I don't think so.

[Jane Coston]

I don't think.

[Anya Zolajowski]

I don't think so.

[Jane Coston]

Hours after that hearing, Secretary Hegseth accompanied President Trump to Fort Bragg to mark the 250th anniversary of the Army. President Trump used the occasion to speak on a variety of topics, including the might of the US Military, his one big beautiful bill, and how terrible. Los Angeles. The nation's second largest city is in Los Angeles. The governor of California, the mayor of Los Angeles.

[Anya Zolajowski]

They'Re incompetent and they paid.

[Jane Coston]

Troublemakers, agitators and insurrectionists. They're engaged in this willful attempt to nullify federal law and aid the occupation of the city by criminal invaders. A very normal way to discuss a city in your own fucking country. California Governor Gavin Newsom filed suit against the Trump administration, mobilizing thousands of members of the state's National Guard over the weekend. Newsom also filed an emergency restraining order to block Trump from deploying even more troops to la. The request was denied, with a hearing set for Thursday afternoon. As of our recording time Tuesday afternoon, one thing Trump made clear is that this country will restore military bases named after leaders of the Confederacy and who lost the war. They fought to leave this country under the Biden administration. The names of those forts were changed in an effort to make the armed forces more inclusive and less into losers. President Trump's visit to Fort Bragg comes before Saturday's military parade in Washington, D.C. which just happens to coincide with his birthday. On Tuesday morning, Trump told reporters that any protesters at the parade would face consequences. Any protesters, I repeat, anything. And for those people that want to protest, they're going to be met with very big force. And I haven't even heard about a protest.

[Anya Zolajowski]

But you know, this is people that.

[Jane Coston]

Hate our country, but they will be.

[Anya Zolajowski]

Met with very heavy force.

[Jane Coston]

Again, normal we are making great progress on our Republican reconciliation bill that will lead to a stronger and safer America. Republican Senate Majority Leader John Thune appears to be optimistic, or at least is trying to stay optimistic, about President Trump's alleged big beautiful bill. Republicans in the Senate are set to mull over the bill today, while some colleagues are likely to keep adding updates. Republicans are still debating Medicaid cuts, changes to food aid and of course, the deficit. On Tuesday, Politico reported Republicans were trying to finalize a scaled down plan to direct the cost of some federal food aid to states as a way to pay for the mega bill. The House had passed its version a month ago, but even with all this stuff to hammer out, House Speaker Mike Johnson says the GOP can still deliver the bill to Trump by July 4th. That's despite the fact that ex Trump friend Elon Musk took shots of the bill last week, calling it a quote, disgusting abomination.

[Anya Zolajowski]

The aim was to get to Gaza and to be able to distribute the humanitarian aid. We were 12 peaceful volunteers sailing on a civilian ship carrying humanitarian aid on international waters.

[Jane Coston]

We did not break laws.

[Anya Zolajowski]

We did nothing wrong.

[Jane Coston]

Activist Greta Thunberg was deported by Israel Tuesday after she was detained on an aid ship headed for Gaza. The Mad Lane, operated by the Freedom Flotilla Coalition, was intercepted by Israeli forces Monday. Israel's Foreign Ministry said in a post on Twitter there are ways to deliver aid to the Gaza Strip. They do not involve Instagram selfies. The tiny amount of aid that was on the yacht and not consumed by the celebrities will be transferred to Gaza through real humanitarian channels. Thunberg spoke to reporters after landing in Paris.

[Anya Zolajowski]

This is about bringing as much humanitarian aid as we possibly could while also sending a message of solidarity and hope, telling Palestinians, we stand behind you in this struggle and we are joining the global uprising of people demanding an end to the oppression and decolonization. Not just in the metaphor.

[Jane Coston]

The Freedom Flotilla Coalition and other rights groups claim Israel violated international law by intercepting the ship and, quote, abducting them from international waters and forcibly transferring them into Israeli territory. Israel denies the claim, saying its naval blockade of Gaza is lawful and ships like the Madeleine are just trying to breach it. And that's the news. Before we go, Jacinda Ardern, former prime minister of New Zealand, pandemic handling powerhouse and all around badass, is on this week's episode of Pod Save the World. She joins host Tommy Vitor to talk about her new book, a Different Kind of How she navigated Covid while other world leaders failed, the global rise of the far right and why taking on big tech is a part of the job now. Listen to the interview now on the Pod Save the World feed or watch on YouTube. That's all for today. If you like the show, make sure you subscribe, leave a review, ask questions about why a Republican member of Congress is quitting Congress to start a new business in Guyana, maybe. And tell your friends to listen. And if you're into reading, I'm not just about how Republican Representative Mark Green, chair of the Homeland Security Committee, is going to quit Congress for a job he won't tell anyone about that has something to do with Guyana. But again, he won't say More like me what a Day is also a nightly newsletter. Check it out and [e-mail] subscribe I'm Jane Coston and what an interesting and random and very curious decision. Water Day is a production of Crooked Media. It's recorded and mixed by Desmond Taylor. Our associate producers are Raven Yamamoto and Emily Foer. Our producer is Michelle Aloy. We had production help today from Johanna Case, Joseph Dutra, Greg Walters and Julia Claire. Our senior producer is Erica Morrison and our executive producer is Adrienne Hill. Our theme music is by Colin Gilliard and Kashaka. Our production staff is by proudly unionized with the Writers Guild of America east.

[Anya Zolajowski]

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[Jane Coston]

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[Anya Zolajowski]

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[Jane Coston]

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[Anya Zolajowski]

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[Jane Coston]

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