Photo: Filip Maljković
American International Group is planning to curb homeowners insurance sales for owners at high risk of floods, storms, or wildfires in 200 zip codes across the United States, according to a report in the Wall St Journal. AIG is the third major insurer in recently to announce cuts to homeowners insurance.
“AIG’s actions are shameful,” David Arkush, director of Public Citizen’s Climate program. “It is a top global insurer of oil and gas — meaning that, more than most insurers on the planet, it is contributing to and profiting from the very climate harms that are increasingly devastating the lives and property of its own customers. As the harms grow more severe, it is simply abandoning them.”
AIG claimed to adopt strong climate policies in March 2022, including commitments to use “science-based targets” to “meet the goals of the Paris Agreement” in a “planned phase-out of fossil fuels,” Arkush said, adding since then, the company has taken no visible action to advance these policies.
“To the contrary, AIG has even refused to rule out underwriting the expansion of oil and gas, which is sharply at odds with its purported commitments,” he said.
In May, the largest homeowner insurance company in California, State Farm, announced that it would stop selling coverage to homeowners. The curtailed service isn’t just in wildfire zones, but everywhere in the state.
Allstate, the state’s fourth-largest property and casualty insurance provider, has stopped selling new home, condominium, or commercial insurance policies in California, the company announced in early June.
These insurers are responding to an increased number of natural disasters, many of them more severe, due to climate change. While climate change will impact homes differently across the country, policyholders will likely face higher rates and higher deductibles, while insurers will become more selective about providing coverage and may provide lower payouts.