Climate change-fueled wildfires, floods, and severe storms are becoming more frequent and expensive. Already, climate-related damages are costing the global economy an estimated $16 million per hour. Who’s paying these costs? In many cases, it’s insurance companies that are footing the bill.
Extreme weather events are putting serious strain on insurance companies. Over the past two decades, climate change has caused $600 billion in insured losses. The result: rate increases for consumers, and a decrease in availability of insurance protection.
But primary insurers and reinsurers continue to underwrite and invest in fossil fuels, even as they face dramatic losses associated with catastrophic weather-related events, driven by the high-carbon industries they support.
Drop the policy, not the planet
If you’re concerned that your insurance company may be using your premium payments to fund climate chaos, there are some simple steps you can take to learn more and find sustainable insurance alternatives.
Step 1 – Find out if your insurer is supporting fossil fuels
Unfortunately, the biggest US insurance carriers have billions invested in fossil fuel stocks and bonds. These firms understand that climate change poses financial risks; they take climate risk from wildfires into account when setting homeowner insurance rates, and sometimes refuse to provide any coverage at all. But they’re seemingly not addressing the risk their own investments are helping create. The data below is from the Investing in Climate Chaos database by Urgewald, and was collected by Green America in May 2024.
| Insurance Company | Total Fossil Fuel Investments (US$) |
|---|---|
| Berkshire Hathaway (parent of GEICO) | $95.8 billion |
| State Farm | $20.6 billion |
| USAA (through Victory Capital) | $11.2 billion |
| AIG | $9.7 billion |
| Nationwide | $7.2 billion |
| Allstate | $4.5 billion |
| Travelers | $1.9 billion |
| Liberty Mutual | $1.8 billion |
| The Hartford | $1.3 billion |
Another resource is the Insure Our Future Scorecard, which looks at 30 of the largest primary insurers and reinsurers and rates their fossil fuel underwriting and investments. The scorecard also highlights the imbalance between premiums from renewables versus fossil fuels, revealing which companies are accelerating the energy transition, and which are falling behind.
Step 2 – Search for green insurance solutions
If you’ve found out that your insurance company is financing industries that are fueling the climate crisis, it may be time to consider a more sustainable insurance solution.
One helpful resource is Green America’s Climate Smart Insurance Directory, which lists insurance companies in each state that avoid insuring fossil fuel projects, and avoid direct investment in the fossil fuel industry. The directory has options for both home and auto insurance.
Beyond your personal finances, you can also encourage your workplace to engage their commercial insurance providers and ask for climate-smart policies. Organizations like Premiums for the Planet can help connect businesses with insurers who understand that the future of insurance requires climate action.
Step 3 – Check your investments for insurance companies supporting fossil fuels
Fossil Free Funds introduced our Fossil Fuel Finance ratings for mutual funds and 401(k)s in 2022, helping you discover if you’re invested in insurance companies supporting coal, oil, and gas. Now, we’ve updated those ratings to use the most recent data on insurance company underwriting of fossil fuels.
If you’re saving for retirement, your investments are likely invested in the same insurance companies that are fueling the climate crisis. As You Sow’s Fossil Fuel Finance ratings are based on data from the Insure Our Future Scorecard. We assign scores to mutual funds based on a portfolio’s investments in insurance companies providing financial commitments to fossil fuels – including tar sands, arctic drilling, and coal mining. These ratings help investors search for funds that avoid climate risk from financial institutions.
Spread the word
Let others in your circle know about green insurance options. They may have the same concerns about climate change and environmental impact as you. Encouraging these conversations can extend the impact beyond your individual choices and help speed the growth of the sustainable insurance industry.
It’s time for insurance companies to accelerate the transition to a just and sustainable economy. By continuing to underwrite fossil fuel expansion and invest in fossil fuel companies, the insurance industry is deepening its own crisis and exposing both policyholders and investors to serious financial risk. Finding a sustainable insurance company and investing in funds that avoid insurance companies with poor climate safeguards could help protect your savings and help build a safe and sustainable future for all.
