California's fall from grace has been steep and swift, and now even the insurance companies are pulling out. The two biggest American home insurance companies, State Farm and Allstate, announced last week that they will stop selling insurance policies to Californians. Why? Climate change-related wildfires are making it too risky to insure Californian houses.
California, the most populous US state (40 million people), is now entering the process that began in the United States in 1992, when Hurricane Andrew devastated Miami and the big US insurance companies fled from Florida.
Most people ended up with the Citizens Property Insurance Corporation, a state-backed insurer of last resort that only covers wind damage. However, that model is teetering on the brink, because almost every year since 2017 has been a hurricane year for Florida. It's the same in South Africa, in India, in Japan, pretty much everywhere. As the scale and frequency of big climate-related events grows, the big insurers are bailing out of the most seriously affected regions.
