I received a letter from Nationwide Insurance. I’m ashamed to admit that, based on our previous correspondence, I assumed they were asking me for money.
They were not asking me for money.
In fact, Nationwide was informing me that there was no amount of money they’d accept to continue our ten-year relationship. Like any breakup, they were vague about their reasons:
The reason for nonrenewal is your current underwriting company has made the business decision to exit the homeowners product line in California.
Still, they could have come up with a more believable excuse. They would no longer insure my house because I live in California? It’s not like I bought a mid-century modern in Port-au-Prince. It’s California. About 12 percent of Americans live here. We make up about 20 percent of the value of the entire U.S. residential real estate market. Do we light too many candles? Yes. Are we as diligent about cleaning the dryer lint trap as Utahans? Probably not. But we don’t smoke in bed or – thanks to massive innovation in the gummy space – anywhere else. We are at least as insurable as Nevadans.
And it’s not as if I live in some obscure town in California called Volcano Gully. Or on the beach. Or a cliff. Or anywhere near Kanye West. I live in Hollywood, one of the most populous parts of Los Angeles.
And it wasn’t just Nationwide. No major insurance company was interested in insuring my house.
Is this the worst consequence of climate change? Yes, it is. Sure, it was a tragedy when all those people died of heatstroke during the 2015 hajj. And it was awful that more than 10,000 elderly French people died from heat in the summer of 2003. And dangerous that temperatures got so hot in America this summer that mail-order medications melted or evaporated. But those things didn’t happen to me. If Greta Thunberg focused on losing home insurance, we’d cut CO2 emissions much more quickly.
As I was panicking about losing my home insurance, which is something my bank requires for me to continue having a mortgage, my insurance broker emailed with surprising news: she found a company willing to insure my house. That company is Bamboo, an insurance company so dubious that it’s called Bamboo. Bamboo offered me much worse insurance for nearly twice as much as I was paying. She said we should grab it right away before they realized that I live in California. I am now a proud Bamboo customer.
Nearly seven percent of home purchases fell out of escrow because buyers couldn’t find insurance. This is bad for everyone except escrow companies, unless escrow companies need to insure their offices. Sure, California could change its 1998 law requiring insurance companies to justify rate increases based on their last 20 years of losses – most of which occurred before climate change really got going. But changing the law would be seen as jacking up people’s insurance, possibly leading to a legislature with six or seven Republicans.
Instead, entrepreneurs will keep creating new insurance companies without those pesky 20 years of pre-existing premium numbers. Companies like Bamboo. Only with even dumber names like Bmbü. No matter what happens, fewer homes will be sold and built in a state with a housing crisis.
We finally have a real chance to tackle climate change now that it’s affecting the wealthy. Meanwhile, I’m going to make sure our sprinklers keep our backyard from becoming dangerously dry. Oh, wait…
Dear Joel, this is no joke. And the only reason the insurance problem isn’t a national crisis on the level of World War III is because people are afraid to talk about it because it will affect the housing market. If the Democrats could come up with a way of dealing with this catastrophe before the election, they will be a shoe-in. LOL The only other problem that comes close to insurance-collapse is the scandle of the unregulated, homeowners-association management companies that can do whatever they want with association funds because NO ONE is watching. Also not discussed because —surprise! — no one wants to disturb the housing market. You are correct in your assessment that the shit has now hit the fan.
Condolences from Canada. We are watching your election, utterly gobsmacked at the news that it's 'close', especially after the debate, which frankly, made our little watch party laugh out loud, though admittedly, there was a note of hysteria in our chorus. We know our American neighbours are in fact, just like us, only you've been under a pressure we can't imagine, and imho, it's made roughly half of you either 1) crazy with fear or 2) determined to keep your tax breaks, even if it spells disaster. Good luck, we're rooting for you!