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Insurance climate nightmares

Florida woman in hurricane-damaged home

Steinhatchee, Fla., resident Bobbi Pattison in her hurricane-damaged home. Photo: Thomas Simonetti for The Washington Post via Getty Images

Property insurance is in the hot seat as Congress weighs more disaster relief.

Why it matters: As intense weather events take a toll on insurers, those same companies are getting regular grousing from lawmakers over their tense relationships with homeowners.

  • The big question is whether Congress will take fresh action to protect properties from climate hazards by passing new legislation or by summoning major insurers to testify at hearings.
  • Or there's the likeliest scenario: lawmakers lean on old favorites — more federal aid and the National Flood Insurance Program, which expires at the end of the month.
  • "We have not really wrestled with the actual damages done by catastrophic occurrences across the country," said Senate Banking Committee ranking member Tim Scott, a veteran of the insurance business.

Driving the news: A Banking hearing Thursday on "challenges in the property insurance market" focused almost entirely on climate-fueled disasters. It's the second committee to take on insurers and climate change after Budget.

  • There's good reason: States from coast to coast are watching insurers flee over increasingly harmful floods, hurricanes and wildfires.
  • Regulators are also scrutinizing the sector, with Treasury's Federal Insurance Office regularly monitoring how insurers incorporate climate risk into their policies.
  • "The number of homes and the value of those homes in high-hazard areas is increasing dramatically, and that's driving the claims experience for insurance companies," said Nat Wienecke of the American Property Casualty Insurance Association.

Between the lines: The Banking hearing was largely a typical partisan event, with Democrats wanting more attention paid to climate risk and Republicans hoping for less regulation.

  • But homeowners' climate-fueled reality couldn't be ignored. Michelle Norris, of faith-based National Church Residences, told the panel the organization had three of its highest claims in the last two years — and now it faces fewer insurance options.
  • "Insurance companies can't take our money for decades and decades and say, 'Oh, now we realize there's climate change — now we're out of here,'" vented Douglas Heller, director of insurance for Consumer Federation of America.

What they're saying: Committee member Mike Rounds, a Republican, told Axios earlier in the week that insurers' struggles to operate in certain states is due to weather events that "may" be "part of a climate change phenomenon."

  • "Look, climate change is for real. It's not like it's not there," Rounds said. "The question is, how do you deal with it?"

The intrigue: One likely congressional response would be overhauling the NFIP, which serves to help homeowners without private flood insurance (home insurance doesn't always cover it).

  • The hearing featured clear concerns across party lines about the NFIP expiring. But don't bet on quick action.
  • Banking Chair Sherrod Brown told Axios he's eyeing an October hearing on reauthorizing the program — which would fall after its expiration.
  • "We've tried, both parties have tried for years here.... There's not partisanship so much as there's regional interest [at play]," he said.
  • Meanwhile, Rounds said Wednesday that folks were trying to hotline a bill from Banking panel member John Kennedy reauthorizing the NFIP through 2024, and no objections had been raised. But there's been no floor action yet.
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