The U.S. Senate Committee on the Budget convened on December 18, 2024, to discuss the escalating crisis in the insurance industry driven by climate change. The meeting highlighted alarming trends in non-renewal rates and rising premiums, which experts warn could destabilize the market.

During the session, it was revealed that non-renewal rates, while currently low in absolute terms, are rising and serve as an early warning sign of market instability. The committee released a report indicating that climate change is a significant factor behind these increases, particularly in regions prone to extreme weather events such as wildfires and hurricanes. Notably, Florida, Louisiana, and California are experiencing the highest non-renewal rates.

The report, based on data from nearly two dozen insurers representing about two-thirds of the homeowners insurance market, confirmed that areas most affected by climate-related risks are seeing the steepest increases in non-renewal rates. Other regions, including parts of Southern New England, the Carolinas, and Hawaii, also reported significant spikes, indicating that the impact of climate change is widespread.

Furthermore, the committee noted a direct correlation between rising non-renewal rates and increasing insurance premiums, framing climate change as a pressing cost-of-living issue for families across the nation. The report emphasized that without a rapid transition to clean energy, the frequency and severity of climate-related extreme weather events will continue to rise, leading to even higher insurance costs and potential financial crises similar to the 2008 housing market collapse.

The committee underscored that climate change is no longer just an environmental concern but has evolved into a significant economic threat that demands urgent attention. As the meeting concluded, members expressed the need for continued monitoring and potential adjustments to the report as new data emerges, reinforcing the urgency of addressing the climate-driven insurance crisis.