Last November, two Washington residents filed a lawsuit accusing petroleum corporations of misleading the public for decades about fossil fuels’ effect on climate change and how global warming is harming the planet and its inhabitants. Their lawsuit marks the latest addition to the growing number targeting Big Oil.
The case, however, was novel, given the plaintiffs’ damage claims: That increased carbon emissions from fossil fuel burning have intensified extreme weather events, such as hurricanes, wildfires, floods and heat waves, and thereby led to rising insurance premiums and “precipitated a homeowners’ insurance crisis.”
The number of climate-related disasters has surged in recent years and caused billions of dollars’ worth of damage, undeniably triggering a spike in insurance. This has eaten into insurance companies’ profits, prompting them to raise their premiums at a much higher rate than inflation — especially in disaster-prone areas. Many insurers are simply abandoning homeowners in areas with a high wildfire risk by canceling or refusing to renew their policies.
Increases in home insurance
premiums (projected), 2024–2025
$5,984
CO
10.8%
$6,630
$4,460
NM
6.4%
$4,745
$3,012
AZ
7.6%
$3,240
$2,424
CA
20.9%
$2,930
$2,408
ID
7.8%
$2,595
$2,268
WY
6.9%
$2,424
$2,204
MT
10.4%
$2,433
$2,037
UT
8.7%
$2,215
$1,854
WA
7.6%
$1,995
$1,743
NV
5.5%
$1,839
$1,617
OR
11.6%
$1,807
$1,548
HI
16.8%
$1,808
$1,470
AK
$1,543
5%
$3,259
U.S.
avg.
8%
$3,520
$0
$2,000
$4,000
$6,000
Increases in home insurance
premiums (projected), 2024–2025
$5,984
CO
10.8%
$6,630
$4,460
NM
6.4%
$4,745
$3,012
AZ
7.6%
$3,240
$2,424
CA
20.9%
$2,930
$2,408
ID
7.8%
$2,595
$2,268
WY
6.9%
$2,424
$2,204
MT
10.4%
$2,433
$2,037
UT
8.7%
$2,215
$1,854
WA
7.6%
$1,995
$1,743
NV
5.5%
$1,839
$1,617
OR
11.6%
$1,807
$1,548
HI
16.8%
$1,808
$1,470
AK
$1,543
5%
U.S.
avg.
$3,259
8%
$3,520
$0
$2,000
$4,000
$6,000
Increases in home insurance
premiums (projected), 2024–2025
$5,984
CO
10.8%
$6,630
$4,460
NM
6.4%
$4,745
$3,012
AZ
7.6%
$3,240
$2,424
CA
20.9%
$2,930
$2,408
ID
7.8%
$2,595
$2,268
WY
6.9%
$2,424
$2,204
MT
10.4%
$2,433
$2,037
UT
8.7%
$2,215
$1,854
WA
7.6%
$1,995
$1,743
NV
5.5%
$1,839
$1,617
OR
11.6%
$1,807
$1,548
HI
16.8%
$1,808
$1,470
AK
$1,543
5%
$3,259
U.S.
avg.
8%
$3,520
$0
$2,000
$4,000
$6,000
This has effectively increased housing costs in places that were already facing an affordability crunch, hitting lower-income families the hardest. And the housing market could be further hampered as insurance becomes prohibitively expensive or impossible to obtain. On the other hand, however, higher premiums in higher-risk areas could discourage building in, say, the wildland-urban interface.
It will be up to the courts to decide whether to hold Big Oil accountable, but the data makes it clear that as the planet heats up, so do insurance costs. “One thing is certain: Unless the United States and the world rapidly transition to clean energy, climate-related extreme weather events will become both more frequent and more violent, resulting in ever-scarcer insurance and ever-higher premiums,” according to a 2024 Senate Budget Committee report. “Climate change is no longer just an environmental problem. It is a looming economic threat.”
$114 billion; $80 billion
Amount of damage caused by climate-related disasters between 2018 and 2022 and the portion of that damage that was insured. Early last year, a Treasury Department analysis of climate change’s effects on the homeowners insurance market found that the number of disaster declarations for climate-related incidents during that five-year period was double the national 50-year average.
8.7%
Amount by which average homeowners insurance premiums rose faster than inflation nationwide during the 2018-2022 period. Residents of disaster-prone areas saw much larger increases — assuming they still had insurance.
16,251; 2,046
Number of homes destroyed and damaged respectively by the Los Angeles-area Eaton and Palisades fires in January 2025.
72,000
Number of homeowners, rental dwelling, commercial apartment and other property insurance policies canceled by State Farm in California due to “catastrophe exposure” in 2024. Carriers have canceled a total of nearly 400,000 policies in the state since 2021.
$40 billion
Estimated insured losses from the Eaton and Palisades fires — four times the cost of the 2018 Butte Camp Fire, which caused $10 billion in insured losses.
13,500; $5 billion
Number and value of claims State Farm reported paying out related to the Eaton and Palisades fires, prompting it to ask state insurance regulators for an emergency 22% rate hike.
$36 billion; $220 million
Combined profits and CEO compensation respectively for 22 publicly traded insurance companies in 2024.
States with highest exposure to wildfires
California
1,544,015 at-risk properties
$785K median home value
$1.21 trillion
Colorado
317,425 at-risk properties
$621K median home value
$197 billion
Utah
182,426 at-risk properties
$615K median home value
$112 billion
Texas
344,454 at-risk properties
$297K median home value
$102 billion
Arizona
225,918 at-risk properties
$432K median home value
$98 billion
Washington
151,231 at-risk properties
$592K median home value
$89 billion
Florida
170,764 at-risk properties
$400K median home value
$68 billion
Montana
99,572 at-risk properties
$485K median home value
$48 billion
Oklahoma
102,877 at-risk properties
$200K median home value
$21 billion
Wyoming
31,177 at-risk properties
$335K median home value
$10 billion
$0
$500 billion
$1 trillion
Total exposure
States with highest exposure to wildfires
California
1,544,015 at-risk properties
$785K median home value
$1.21 trillion
Colorado
317,425 at-risk properties
$621K median home value
$197 billion
Utah
182,426 at-risk properties
$615K median home value
$112 billion
Texas
344,454 at-risk properties
$297K median home value
$102 billion
Arizona
225,918 at-risk properties
$432K median home value
$98 billion
Washington
151,231 at-risk properties
$592K median home value
$89 billion
Florida
170,764 at-risk properties
$400K median home value
$68 billion
Montana
99,572 at-risk properties
$485K median home value
$48 billion
Oklahoma
102,877 at-risk properties
$200K median home value
$21 billion
Wyoming
31,177 at-risk properties
$335K median home value
$10 billion
$0
$500 billion
$1 trillion
Total exposure
States with highest exposure to wildfires
California
1,544,015 at-risk
properties
$785K median
home value
$1.21 trillion
Colorado
317,425 at-risk
properties
$621K median
home value
$197 billion
Utah
182,426 at-risk
properties
$615K median
home value
$112 billion
Texas
344,454 at-risk
properties
$297K median
home value
$102 billion
Arizona
225,918 at-risk
properties
$432K median
home value
$98 billion
Washington
151,231 at-risk
properties
$592K median
home value
$89 billion
Florida
170,764 at-risk
properties
$400K median
home value
$68 billion
Montana
99,572 at-risk
properties
$485K median
home value
$48 billion
Oklahoma
102,877 at-risk
properties
$200K median
home value
$21 billion
Wyoming
31,177 at-risk
properties
$335K median
home value
$10 billion
$0
$500 billion
$1 trillion
Total exposure
Illustrations by Steph Littlebird/High Country News.
SOURCES: Policygenius, Climate Power, First Street, U.S. Department of the Treasury’s Federal Insurance Office, Equitable & Just Insurance Initiative, U.S. Senate Budget Committee, Insurify, ZestyAI.
We welcome reader letters. Email High Country News at editor@hcn.org or submit a letter to the editor. See our letters to the editor policy.
This article appeared in the February 2026 print edition of the magazine with the headline “As a planet heats, insurance premiums rise.”
Republish our articles for free, online or in print, under a Creative Commons license.
