Insurers Dodge Climate Costs; Fossil Fuel Should Pay

The report examines the insurance crisis in California following devastating wildfires in Los Angeles, highlighting how private insurers like State Farm have restricted coverage or exited the market, pushing risk onto the state-supported FAIR Plan. It contends that insurers are complicit in the climate crisis due to over $500 billion in fossil fuel-related assets and argues for the adoption of legislation, such as SB222, to force fossil fuel companies to pay for climate-driven losses through the right of subrogation.

• The January wildfires in Los Angeles, intensified by climate change, caused at least 28 deaths, destroyed approximately 16,000 structures over nearly 50,000 acres, and are expected to result in up to $40 billion in insured property damage.
• US insurance companies maintain significant financial ties to the fossil fuel sector, with more than $500 billion invested in fossil fuel-related assets and top insurers earning $5.2 billion from underwriting fossil fuel businesses in 2023.
• State Farm, the largest property and casualty insurer in California, has invested over $6 billion in major carbon emitters including ExxonMobil, Chevron, Coterra Energy, Shell, and Rio Tinto, while simultaneously refusing to renew 30,000 home insurance policies in California in 2023 due to wildfire risks.
• The FAIR Plan, California's insurer of last resort, is facing insolvency due to unprecedented losses, leading the Insurance Commissioner to levy a $1 billion assessment on private insurers, of which $500 million will be passed on to homeowners.
• California home insurance rates increased by 48.4 percent between 2019 and 2024, and twelve major insurers have restricted coverage despite receiving significant rate hikes.
• Proposed California bill SB222 seeks to hold fossil fuel companies accountable by directing the FAIR Plan and private insurers to use the right of subrogation to recover costs of climate-driven disasters from responsible parties.

APA

Fenlock, L., Slidders, C., & Reisch, N. (2025). Insurers Dodge Climate Costs; Fossil Fuel Should Pay. Center for International Environmental Law. https://www.ciel.org/insurers-dodge-climate-costs-fossil-fuel-should-pay/

Chicago

Fenlock, Lindsay, Charles Slidders, and Nikki Reisch. Insurers Dodge Climate Costs; Fossil Fuel Should Pay. Center for International Environmental Law, 2025. https://www.ciel.org/insurers-dodge-climate-costs-fossil-fuel-should-pay/.

Wikipedia

{{cite report |last1=Fenlock |first1=Lindsay |last2=Slidders |first2=Charles |last3=Reisch |first3=Nikki |title=Insurers Dodge Climate Costs; Fossil Fuel Should Pay |publisher=Center for International Environmental Law |date=4 March 2025 |url=https://www.ciel.org/insurers-dodge-climate-costs-fossil-fuel-should-pay/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fenlock2025insurers, author = {Fenlock, Lindsay and Slidders, Charles and Reisch, Nikki}, title = {{Insurers Dodge Climate Costs; Fossil Fuel Should Pay}}, institution = {Center for International Environmental Law}, year = {2025}, month = mar, url = {https://www.ciel.org/insurers-dodge-climate-costs-fossil-fuel-should-pay/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }