Abstract

In 2020, the United States suffered a record number of named storms, a record number of storms causing $1 billion or more in damage, a derecho that destroyed much of Iowa's corn crop, and previously unheard-of levels of wildfire frequency and damage in California, Oregon, and Washington. The effects of climate change are causing a crisis of affordable, available homeowner insurance. As more and more homes in the United States are in high-risk areas for natural catastrophes, insurers increasingly choose not to offer insurance at all in some communities, exclude disaster risks from coverage in others, and dramatically raise prices in still others. For ever-growing numbers of homeowners, the only option is an inadequate and unattractive public insurance product of last resort. As a result, growing numbers of climate change survivors are finding there is no way home.

Building on three recent proposals from regulators and prominent academics to solve the problem of affordability and availability, this Article provides a novel solution: first, establish a requirement that an insurer who offers homeowner hazard insurance anywhere in a state must offer it everywhere, with no exception—full stop. Second, adopt state rules providing that rate filings or form filings for homeowner hazard insurance will not be approved if the insurance would exclude any natural disaster peril. Third, adopt state rules providing that rate filings for homeowner hazard insurance will not be approved if the insurance discriminates against homes based on the location of the home.

By building a set of market incentives to sell affordable, comprehensive insurance everywhere and protecting insurers from price-cutting by competitors, insurance will be affordable everywhere and will be available everywhere. Insurers will want to sell it, and homeowners will be able to buy it. And virtually all homes in the United States will have access to affordable insurance for the next peril, regardless of what it may be.

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