New York bill would make Big Oil pay for the home insurance crisis

The cost of home insurance is rapidly rising across the country, as insurers pass the escalating costs of extreme weather disasters on to their customers through higher rates. But New York lawmakers are trying to break this cycle, by making the companies most responsible for the problem pay their fair share of the financial consequences.

Senate Bill 8585, introduced this week by New York Senator Brian Kavanagh, would empower the state to take the largest oil and gas companies to court following major weather disasters made worse by climate change. 

At a New York State Senate hearing on November 18, insurance industry representatives were clear that increasingly damaging weather events are a core driver of higher insurance rates, which also contribute to rising rents in a region struggling with a housing affordability crisis. As climate disasters mount, rates have steadily risen — up at least 19% statewide since 2018 and more than 50% in multifamily units in New York City since 2020. 

New York has seen a series of devastating storms in recent years, including Hurricane Ida in 2021, which caused $9 billion in flooding damage. Just this year, two historic rain events — first in July and another just last month — battered New York City and caused extensive flooding and even drowning deaths. 

According to testimony from the American Property Casualty Insurance Association, New York did not experience more than three billion-dollar weather events in a single year between 1980 to 2003. Last year the state saw 10 separate natural disasters that each caused over a billion dollars in inflation-adjusted losses. 

There’s no mystery who’s to blame for this. Decades of scientific research has shown that fossil fuel pollution is warming the atmosphere and supercharging wildfires, floods, and storms. The oil giants responsible for that pollution knew decades ago that their products would cause potentially “catastrophic” extreme weather events. But rather than change their business model, they engaged in a decades-long campaign to deceive the public about their products’ contribution to climate change — thwarting efforts to transition to clean energy. That deception continues today, with Big Oil vastly overstating their clean energy investments while expanding their production of fossil fuels. 

How is it fair that everyday New Yorkers are shouldering the costs of extreme weather disasters through higher insurance rates, while the companies that caused the problem — and lied to the public about it — pay nothing? 
 

Senate Bill 8585 is an opportunity to make Big Oil take responsibility for the costs of extreme weather disasters worsened by climate change. If passed, the state’s attorney general would be empowered to take fossil fuel giants to court to recoup insurance losses the next time a climate-driven weather disaster hits New York — rather than those costs being passed on to insurance policyholders.

States like Hawaiʻi and California are advancing similar legislation, as financial damages from climate disasters threaten to bankrupt their “insurer of last resort” programs and insurers back out of entire communities they deem “high risk.” 

There’s clear precedent for third parties that caused insurance losses to be held financially accountable for them. When you get rear-ended in a traffic collision, your insurance company goes after the other driver in court. When utilities fail to maintain their power lines and ignite a wildfire that destroys communities, insurance companies take them to court — and routinely win settlements. Why do fossil fuel companies get a free pass while supercharging extreme weather disasters that are causing a nationwide insurance crisis?

“Itʻs not fair that New Yorkers are being asked to pick up the tab for the damages of climate change while the companies that made the problem worse pay nothing,” Iyla Shornstein, Political Director at the Center for Climate Integrity testified at the hearing. “New York needs every tool in the toolbox to protect its citizens from massive insurance rate hikes as climate disasters worsen in the coming years. That includes the ability to hold accountable the at-fault companies that knowingly made the problem worse.”

“Insurance is ‘canary in the coal mine’ for the climate crisis. And the canary is dying,” said Dave Jones, former California Insurance Commissioner and Director of the Climate Risk Initiative at the Center for Law, Energy and the Environment at the University of California — Berkeley. “There are actions now that New York can take to make insurance more available and affordable and to hold the oil and gas industry accountable for its contribution to the climate crisis … States can insist that increasing rates and not writing insurance are not the only ways that insurers can address rising losses from climate change.”