In the wake of the devastating wildfires in Los Angeles in January 2025, the effect of climate change on the insurance industry was detailed in a report by the U.S. Treasury Department. In what it called the most comprehensive snapshot of the homeowners insurance market to date, the agency wrote in its press release that “homeowners insurance is becoming more costly and harder to procure for millions of Americans as the costs of climate-related events pose growing challenges to insurers and their customers alike.”
Researchers including those at the Harvard Business School echoed that conclusion: “Climate change is causing turbulence in homeowner insurance markets, as a growing number of extreme weather events dramatically drive up costs.”
