Biden wades into home insurance mess

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Nov 06, 2023 View in browser   By Minho Kim Presented by Debris is piled in a front yard in Chauvin, La., after a storm in 2021. Federal and state officials are examining climate risks to the insurance industry. | Jessie Wardarski/AP Climate change may be forcing millions of Americans to go without home insurance, as unpredictable weather and intensifying disasters prompt major underwriters to flee hard-hit neighborhoods. In response, the Biden administration is asking top insurance companies — for the first time — to provide detailed, ZIP code-level data about their policies, claims, premiums and losses from 2017 to 2022, write Thomas Frank and Avery Ellfeldt. The inquiry aims to identify regions that could lose coverage in the coming years. Treasury Secretary Janet Yellen said her agency will also assess “the increasing impacts of climate change on household budgets” and help officials improve insurance “availability and affordability.” But House Republicans oppose the effort, as does the insurance industry. GOP lawmakers have introduced two bills that would block the Treasury’s data probe, one of which would gut the Treasury's Federal Insurance Office altogether. The Treasury office “is attempting to bypass state insurance commissioners and add massive new costs onto policyholders’ bills through an unprecedented mandatory climate data call,” Rep. Warren Davidson (R-Ohio) said last week. A growing problem In recent years, wildfires and hurricanes have destabilized insurance markets in California, Colorado, Florida, Louisiana and Texas. California insurers, for example, lost $20 billion in 2017 and 2018 from wildfires that ravaged the state. Since 2019, seven of the state’s 12 top underwriters have fled the California market. The result is rising premiums for homeowners — and some areas where insurance is hard or impossible to get. Consumer advocates say no one knows the scope of the problem, with little data on how disasters have affected insurance in individual communities and regions. “We know the problem is out there. We just don’t know how big a threat it is to the safety and soundness of the banking system,” said Amy Bach, executive director of United Policyholders, a California-based consumer advocacy group. The Treasury isn’t the only one looking into the issue. Democratic Sens. Sheldon Whitehouse (R.I.) and Ron Wyden (Ore.) are launching a separate investigation into the issue, sending letters to 40 insurers requesting information on how companies deal with climate risks and where they pulled back coverage. States, not the federal government, regulate insurance companies. While the Treasury Department could make recommendations, it would face difficulty setting policies that regulate insurers. Whitehouse and Wyden would similarly face obstacles in enacting any laws on the issue. But the efforts will likely increase pressure on insurance companies to address how climate change is increasing property damage and threatens insurers. State regulators are also looking into the issue: A group representing state insurance regulators, the National Association of Insurance Commissioners, opened a probe in August to collect data from property insurance writers.   It's Monday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Minho Kim. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to mkim@eenews.net.   A message from bp: Across the US, bp supports more than 275,000 jobs to keep our energy flowing. Like building grid-scale solar in Ohio AND producing gas with fewer operational emissions in Texas. See how else bp is investing in America.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: James Bikales breaks down the Treasury Department’s long-waited guidance on the electric vehicle tax credit and the complicated dilemma between competing with China and accelerating adoption of cleaner cars and trucks.   GET READY FOR POLITICO’S DEFENSE SUMMIT ON 11/14: Russia’s war on Ukraine … China’s threats to Taiwan … a war in Gaza. The U.S. is under increasing pressure to deter, defend and fight in more ways — but not everyone agrees how. Join POLITICO's 3rd Annual Defense Summit on November 14 for exclusive interviews and expert discussions on global security and the U.S.'s race to bolster alliances and stay ahead of adversaries. Explore critical topics, including international conflicts, advanced technology, spending priorities and political dynamics shaping global defense strategies. Don’t miss these timely and important discussions. REGISTER HERE.     Power Centers Villagers retrieve belongings from land surrounded by floodwaters in Sohbat Pur, Pakistan, last year. | Fareed Khan/AP Fragile deal reached on international climate fund Countries struck a tentative agreement late Saturday evening over the outlines of an international fund for poorer nations that face the worsening impacts of climate change, Sara Schonhardt reports. The negotiations around the "loss and damage" fund were on the brink of collapse after nations could not agree for weeks on its basics, such as which countries should pay and where the fund should be hosted. The U.S. managed to include provisions that say payment for the fund is voluntary, giving the Biden administration the option of not contributing and sparking criticism from climate activists. Battery makers welcome EV slowdown Recent news that big auto companies are delaying investment for electric vehicles bodes poorly for the Biden administration's climate goals. But the slowdown is giving battery makers time to catch their breath, secure the domestic supply chain and drive down prices, David Ferris and Hannah Northey report. The U.S. battery industry has relied heavily on Chinese imports for key minerals and parts. The climate law that requires U.S.-made parts for electric vehicle subsidies has contributed to higher production costs and delays as more automakers laid out plans to boost EV production. UK manufacturers nervously eye EU carbon tariffs British companies that have high carbon emissions — such as steel and aluminum manufacturers — worry that the European Union’s new carbon tax could hurt their businesses relying heavily on the European market, Charlie Cooper reports. After dragged-out negotiations over Brexit, the UK leaders have little appetite for opening new talks with Brussels over how British products will be taxed. From 2026, the EU will levy tariffs on imported products that pollute more than its own standards to reduce carbon emissions.   A message from bp:   In Other News Military pollution: The U.S. and U.K. militaries owe at least $111 billion in reparations to communities most harmed by their carbon emissions, according to a study that investigated monetary costs of planet-warming emissions from defense operations. Overheating: Miami-Dade County commissioners in Florida will decide on Tuesday whether to establish the first county-level workplace heat protections in the United States.   A message from bp: bp added more than $70 billion to the US economy last year, by keeping oil and gas flowing AND developing more lower carbon energy. It’s and, not or. See what doing both means for energy nationwide.   Subscriber Zone A showcase of some of our best subscriber content. U.S. climate envoy John Kerry speaks about reducing methane emissions at the U.N. climate summit last year in Sharm el-Sheikh, Egypt. | Nariman El-Mofty/AP A looming government shutdown in late November could jeopardize the Biden administration's plans to make oil and gas methane regulations a showpiece during the U.N. climate talks later this month. Arizona’s two largest private utilities are arguing for keeping gas- and coal-fired plants as part of their portfolio to maintain reliability despite a decarbonization push. The Forest Service issued a proposed rule that would open the door to carbon capture and storage projects in national forests and grasslands. That's it for today, folks. Thanks for reading.   JOIN US ON 11/15 FOR A TALK ON OUR SUSTAINABLE FUTURE: As the sustainability movement heats up, so have calls for a national standard for clean fuel. Join POLITICO on Nov. 15 in Washington D.C. as we convene leading officials from the administration, key congressional committees, states and other stakeholders to explore the role of EVs, biofuels, hydrogen and other options in the clean fuel sector and how evolving consumer behaviors are influencing sustainable energy practices. REGISTER HERE.       Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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