Latest news with #DaveJones
New York Times
15-05-2025
- Business
- New York Times
The Home Insurance Crisis Is Getting Even More Expensive
Just months after fires devastated parts of Los Angeles, one of the leading home insurers in California, State Farm, is temporarily raising rates 17 percent. The sharp jump, after a 20 percent rate increase last year, is sure to strain family finances in what is already one of the nation's most expensive states for home insurance. It is also just the latest example of the indirect but increasingly costly ways that climate change is affecting the American economy. An insurance crisis is spreading across the country as extreme weather and rising seas batter homes and businesses. As Christopher Flavelle and Mira Rojanasakul reported throughout last year, insurance companies are pulling back coverage, homeowners are paying more and states are struggling to prop up an industry that is tottering as the planet rapidly heats up. 'Insurance is the climate crisis canary in the coal mine, and the canary is dying,' said Dave Jones, director of the Climate Risk Initiative at the University of California, Berkeley, Center for Law, Energy and the Environment. Nowhere is the crisis more acute than in California. Even before the fires struck Los Angeles, state officials were scrambling to stop insurers from abandoning the California market as wildfires grow more frequent and destructive. The Los Angeles fires only made the risks to homeowners, and insurers, more apparent. The total economic toll of the fires, including property damage and longer term economic losses, is expected to top $250 billion, according to AccuWeather, making it one of the most expensive disasters of all time. Carmen Balber, the executive director of Consumer Watchdog, an advocacy group that opposed the rate increases, told Rukmini Callimachi that the increase 'adds insult to injury,' noting that many homeowners insured by State Farm have reported problems collecting payouts following the Los Angeles fires. In a statement published on its website, State Farm said 'we remain focused on helping our customers recover from the wildfire,' and that it had paid $3.51 billion in claims from the fires. And it is this confluence of problems — more frequent disasters, insurers deeming some markets too risky and rising prices for consumers — that is only becoming more common. 'We're going to continue to see substantial rate increases across the country and even more acute increases in areas that have been hit hardest by climate change, like Florida and the West,' Jones said. 'No place is immune to this.' The cost of catastrophe is rising fast. Last year, financial losses related to disasters reached a high of $151 billion, according to Verisk, a data provider for the insurance industry. In the United States alone, there were at least 27 weather events that resulted in damages of at least $1 billion, according to data from the National Oceanic and Atmospheric Administration. (The Trump administration has said it will no longer collect this data.) And with global temperatures still rising and the Trump administration slashing efforts to stop the pollution that is driving climate change, a difficult situation is poised to get worse. 'The trend is all bad,' Jones said. 'We're just going to see more and more extreme and severe weather related events killing more people, damaging more property and causing insurers more and more losses.' Overall, American homeowners saw their insurance premiums increase by an average of 24 percent from 2021 to 2024, according to a recent report by the Consumer Federation of America. The insurance industry's response to this swelling crisis has been twofold: raise rates and write fewer insurance policies. It has also pushed for less regulation. But even in states like Florida, where insurance is lightly regulated, the market is breaking down. 'Florida has done all these things to deregulate their market and allow prices to be set as high as the insurers ask for,' Jones said. Despite that, some of the big insurers have stopped writing new policies in the state. 'That's where the rest of the country is going,' he added. There is no easy solution to the insurance crisis. Even when insurers push higher prices on homeowners who live in low risk areas, the economics of the industry often don't add up. It is likely that longer-term efforts may do the most to repair the home insurance market. Transitioning away from fossil fuels and slowing the increase of global temperatures would surely help, Jones said. Beyond that, stronger adaptation efforts would make homes and communities more resilient. For homeowners, techniques include hurricane-resistantconstruction, fire resistant materials and landscaping that reduces fire risk. Communities can limit the destructive potential of storms and fires by employing better forest management practices and by restoring natural habitats like salt marshes, which can reduce flooding and storm surge damage in coastal areas during hurricanes. But in a rapidly warming world, even those measures may not be enough. As insurers abandon entire markets, some companies are refusing to write policies even for homeowners who have taken extensive steps to limit their risk. 'No state is immune to the impacts of climate change and the impact on insurance prices,' Jones said. Have your home insurance costs risen over the last few years? Do you think climate change has affected your rate? Write us at climateforward@ preferably with your city and state, and tell us your story. You may be contacted by a Times reporter. Trump Administration to uphold some PFAS limits but eliminate others The Environmental Protection Agency said Wednesday that it would uphold drinking water standards for two harmful 'forever chemicals,' present in the tap water of millions of Americans. But it said it would delay deadlines to meet those standards and roll back limits on four other related chemicals. Known as forever chemicals because of their virtually indestructible nature, PFAS are a class of thousands of chemicals used widely in everyday products like nonstick cookware, water-repellent clothing and stain-resistant carpets, as well as in firefighting foams. Exposure to PFAS, or per- and polyfluoroalkyl substances, has been associated with metabolic disorders, decreased fertility in women, developmental delays in children and increased risk of some prostate, kidney and testicular cancers, according to the E.P.A.— Hiroko Tabuchi Read more. An effort to kill off lawsuits against oil giants is gaining steam Over the past decade, some three dozen states and local governments have sued the biggest oil companies in the world, arguing that the industry hid what it knew about the dangers of global warming. The suits are considered a major threat to fossil fuel companies, potentially on the scale of the tobacco industry settlement a quarter-century ago that held cigarette makers financially responsible for the health consequences of smoking. Now, the campaign to stop the oil lawsuits is heating up. In recent weeks, President Trump declared the lawsuits a threat to the American economy, calling them 'ideologically motivated' obstacles to his goal of energy dominance. The Justice Department took the aggressive step of pre-emptively suing two states to try to prevent them from even filing lawsuits like these. — Karen Zraick Read more. More climate news from around the web: Thanks for being a subscriber. Read past editions of the newsletter here. If you're enjoying what you're reading, please consider recommending it to others. They can sign up here. Browse all of our subscriber-only newsletters here. And follow The New York Times on Instagram, Threads, Facebook and TikTok at @nytimes. Reach us at climateforward@ We read every message, and reply to many!
Euronews
23-04-2025
- Business
- Euronews
Why fossil fuels are like renting a home - and solar panel imports soon pay for themselves
ADVERTISEMENT If the world were divided into net fossil fuel importers and exporters, three-quarters of us would live in the former. That's according to new analysis from think tank Ember, which emphasises the energy security that comes from investing in renewables instead. Ministers and energy sector leaders are gathering in London for the International Energy Agency (IEA)'s Summit on the Future of Energy Security. Taking place from 24-25 April, it is a global effort to tackle multiple energy challenges. 'Fossil fuels are like renting a home, renewables are like owning one,' explains Dave Jones, Ember's global insights programme director. Related Eight countries in Europe use renewables for more than half of their heating and cooling needs Ditching fossil fuels would improve energy security for most countries, new research finds 'The difference is simple: with fossil fuels you keep paying, prices are out of your control and the landlord can end the contract when they like. Renewables are an upfront investment, but provide long-term stability and independence.' The new analysis shows that wind and solar are ready to support more countries becoming 'homeowners', from an energy point of view. Which countries are the most and least reliant on fossil fuel imports? Around 74 per cent of the world's population lives in countries that depend on fossil fuel imports from other countries, according to Ember's estimates, based on IEA data from 2022. This is slightly less than previous research from 2018, when 80 per cent of people were reported to live in countries that were net fossil fuel importers. The shift is largely due to the US becoming a net exporter in 2019, having been a long-term net importer. In total, just 12 countries supply 80 per cent of net fossil fuel exports, Ember found. Many countries rely on fossil fuel imports for the vast majority of their overall energy needs, including Japan (87 per cent), Korea (81 per cent), Türkiye (69 per cent) and Germany (67 per cent). Spain and Italy also stick out as big importers in the analysis. At the other end of the spectrum, China has kept its import reliance relatively low at 21 per cent of its energy needs, by using domestic coal and clean electricity, while electrifying its economy. Related World surpasses 40% clean electricity with Europe leading as a 'solar superpower' Solar panels pay for themselves in just a year 'While clean energy infrastructure may require initial investment, it frees nations from volatile fuel imports and recurring costs, unlike fossil fuels, which are a permanent economic drain that keeps you dependent on an external force,' adds Jones. Ember's analysis finds that the import cost of a solar panel 'pays back' in just one year, compared to the import cost of burning gas in a power plant. Importing one gigawatt of solar panels costs $100 million (€87m), based on 2024 average prices. That's equivalent to importing enough gas to generate the same amount of electricity in one year. But importing fossil fuels is a recurring expense for countries. So solar panels quickly pay for themselves. Over a 30-year lifespan of solar panels, the savings are equivalent to 30 years of gas import costs at 2024 prices. ADVERTISEMENT The world's clean power transition is speeding up, with 40 per cent of electricity generated from low-carbon sources last year, according to Ember analysis from earlier this month. Solar and wind could already generate enough electricity to replace the global gasoline demand from motor vehicles, the analysts add today, if the global gasoline vehicle fleet were all electric. Related EVs set to save Europe 20 million tonnes of CO2 this year but transport remains biggest polluter How will renewables factor into Europe's energy security plans? At this week's summit - co-hosted by UK Secretary of State for Energy Security and Net Zero Ed Miliband, and IEA Executive Director Fatih Birol - the IEA is set to release a new framework on energy security, identifying key risks and opportunities, and a set of recommended actions. The IEA has played a significant role in shaping the EU's decarbonisation policy before, including the development of the European Green Deal and the RePower EU Plan. ADVERTISEMENT Since the EU Commission launched the REPowerEU plan in May 2022, LNG and pipeline gas imports from Russia have decreased from 45 per cent in 2021 to 19 per cent in 2024. Renewables have replaced gas, and helped protect European countries from external price shocks. European leaders know that gas does not guarantee energy security - we fell for that trap before 2022. 'European leaders know that gas does not guarantee energy security - we fell for that trap before 2022,' says Julian Popov, former Minister of the Environment of Bulgaria and senior fellow at Strategic Perspectives think tank. 'The pain of Russia's invasion of Ukraine has made it clear that we will not fall for it again." The EU is aiming to achieve full energy independence from Russia by 2027. Birol and Miliband are sure to emphasise, as they have many times before, that a successful energy transition and energy security go hand in hand. ADVERTISEMENT
CBS News
18-03-2025
- Business
- CBS News
FAIR PLAN SECRETS: Why California's insurer of last resort is so secretive
Since the LA fires on January 7, much more attention has been put on the California FAIR Plan, the state's fire insurer of last resort. Once thought of as a small, rarely-used backstop, the plan is now one of the largest in the state. Yet, it's also one of the most secretive insurers in California, able to withhold more information than even the private companies that run it. This may not have mattered much when the plan was small and needed little oversight. But new rules passed last September mean that anyone with property insurance will now pay to cover the FAIR plan's debts. "The reason all of us should care is that we're now on the hook, all of us, in case the FAIR Plan runs out of money," said Dave Jones, California's Insurance Commissioner from 2011-2018. The plan did run out of money and, on February 11 , current Insurance Commissioner Ricardo Lara signed an order authorizing the California FAIR Plan to collect $1 billion from its member companies -- half of which can be passed on to ratepayers. A CBS News California review of public records and data found: Often misidentified as a "state-run" plan, the California FAIR Plan has only a loose connection to the government. It operates as an independent non-profit and is run by a "Governing Committee" mostly consisting of people from the insurance industry. In most years, the plan operates like any other by collecting premiums from customers and paying claims from its revenue and reserves. But, when times are good and the plan runs a surplus, the committee can decide to "disburse" some of those funds back to the member companies like in a stock dividend. If the plan runs out of money, it can request additional funds from its member companies in what's called an "assessment," as it did last month. The last time the plan issued a disbursement was in 2017, right before the historic Tubbs and Thomas fires. At that time, the plan was still small and not yet a major player in fire insurance. "The FAIR Plan used to be an insurance policy mostly in urban areas that would cover your mortgage," said Michael Wara, who researches climate and energy policy at Stanford University. He said the original purpose was never to cover fire catastrophes but to cover inner city homes that had trouble finding coverage after the Watts riots in 1965. California is one of about 30 states nationwide that have FAIR plans. Each has its own rules and governing structure. Sometime after 2017, said Wara, the FAIR Plan began to transform into something different. "It's been changed into something that's much more like a normal insurance policy that will allow you to rebuild after a catastrophe," he said. A spate of non-renewals by major insurers, including State Farm and Farmers , fueled the FAIR Plan's rapid growth. According to the latest data, the California FAIR Plan is the sixth largest in the state and is on track to grow even larger. Just a few months before the LA Fires in January, Helen Meisel in the Pacific Palisades received a strange letter from State Farm, her home insurer. As she feared, it was a notice of non-renewal -- but only partially. "Fortunately," the letter read, "State Farm is keeping your policy, but will exclude fire insurance." Now she had two policies: The California FAIR Plan for fire and State Farm for everything else. She said the total cost was more than $6,000. "I'm paying two policies," she said, "more than double what I was paying before." Along with its unique status as the insurer of "last resort," the California FAIR Plan also enjoys protection from Prop 103 , the main law governing California's notoriously strict insurance regulation. While most every other private insurer in the state must publish regular financial statements, as well as detailed justifications for its rate increases, the California FAIR Plan discloses only the rate filings. That means the details of how much money it has and how it spends it are effectively secret to the public unless the plan chooses to disclose. Unlike similar plans around the country, such as the Florida Citizen's Plan, the California FAIR Plan's governing meetings and minutes are not public. The plan won't even reveal the names of the governing committee members. "I'm a pretty well-known insurance consumer advocate," said Amy Bach, Executive Director of United Policyholders . "People say to me, Amy, who's on the FAIR Plan governing board? I can't find that information out. Like, it's not public." Jones -- California's former insurance commissioner -- recalled that he tried to send a deputy to attend the FAIR Plan meetings. But when his deputy arrived, the FAIR Governing Committee went into a closed-door "executive session." "He showed up, they convened the meeting, and then they went to executive session and left the meeting," said Jones. Lara, the current insurance commissioner, is backing a bill that would add two representatives from the legislature to the committee. But it's not clear how much that would increase transparency if those members are excluded from any real decision-making just as Jones' representative was. While the FAIR Plan posts some select data and statistics online , its board chooses what to disclose and when. Prior to the LA fires, the last time the California FAIR Plan disclosed significant financial information was before the California State Assembly Insurance Committee more than a year ago. President Victoria Roach verbally described the plan's cash flow and reinsurance structure -- leading Representative Jim Wood to remark , "If this were on Wall Street, I'm not sure you'd be able to get away with this." The latest FAIR Plan bylaws seem designed to increase transparency on this front. The plan would be required to issue new reports that include details such as policy counts and total written premiums in distressed areas. However, this all resembles the data currently available on the FAIR Plan's website and fails to include any data about surplus cash or reinsurance. Insurance companies take out their own insurance to help manage particularly large disasters such as the LA fires. In 2022, a Department of Insurance audit found that the California FAIR Plan carried far less reinsurance than comparable plans in other states. Experts told CBS News that this leaves the FAIR Plan significantly more exposed to big disasters. "What that tells you is the FAIR plan is banking on the ability to assess," said Wara. "They're not charging the high-risk people enough, and the plan is to just assess on everybody else." The department's audit had a similar conclusion: "The FAIR Plan believes that its reinsurance needs are much different than a traditional market insurer since it can assess its insurance company members to fund liquidity needs." Prior to the latest rule changes, an assessment would have been a relatively private affair between the FAIR Plan and the insurance industry. But now, every ratepayer in the state is paying as well. For Rex Frazier, a lobbyist for the insurance industry, a lot of this amounts to growing pains. "Right now, this is a private organization that has come into prominence and is growing in an obviously haphazard way," said Frazier. When asked whether he thought the public should be privy to its meetings and financial statements now that the public is on the hook, he replied, "You can understand how someone would have that opinion. But that's not the law today."
The Guardian
14-02-2025
- Business
- The Guardian
EVs and datacentres driving new global ‘age of electricity', says watchdog
The world's electricity use will grow every year by more than the amount consumed annually by Japan because of a surge in electric transport, air conditioning and datacentres, according to the world's energy watchdog. The International Energy Agency has raised its predictions for the world's rising demand for electricity, pegging the growth at almost 4% a year until 2027, up from its previous forecast of 3.4% year. The influential Paris-based agency said the 'new age of electricity' was dawning as a result of the climate crisis as more people begin to use air conditioning to cope with extreme temperature rises and economies begin to turn away from using fossil fuels in favour of cleaner power. More governments are taking steps to rely on electricity for transport and heating systems as well as heavy industry, according to the report, and there is also expected to be a rapid expansion of energy-hungry datacentres used to train artificial intelligence (AI). The forecasts are likely to stoke fears that the race to build more datacentres to support the boom in AI could become a drain on energy supplies, causing costs to rocket and stalling efforts to cut fossil fuels from power generation. The race to consume more electricity will be led by China, where demand grew by 7% last year, and could grow by 6% a year over the next three years, in part due to a boom in its manufacturing of solar panels, batteries and electric vehicles. Rising demand in the US is expected to add the equivalent of California's current power consumption to the national total by 2027. In the European Union, growth is forecast to be more modest, returning to its 2021 levels by 2027, after a crash in demand over recent years triggered by surging costs during the energy crisis. Keisuke Sadamori, a director at the IEA, said: 'The acceleration of global electricity demand highlights the significant changes taking place in energy systems around the world and the approach of a new age of electricity. But it also presents evolving challenges for governments in ensuring a secure, affordable and sustainable electricity supply.' Dave Jones, a director at global energy thinktank Ember, said that although the world's growing stock of clean energy projects would keep pace with the faster than expected growth in electricity use, it would not rise fast enough to displace the existing fossil fuel electricity used today. 'More investment in clean electricity is needed, otherwise coal and gas generation could be at the same record levels in 2027 as they were in 2024,' Jones said. 'The age of electricity has to be the age of clean electricity to realise the cost, security and climate benefits of electrification.'
Yahoo
13-02-2025
- Business
- Yahoo
California's $1 Billion Insurer Bailout Deepens Housing Strains
(Bloomberg) -- California's housing market is already one of the most expensive in the country. A San Francisco condo can cost as much as a four-bedroom house in Texas and families drive hours inland just to find a starter home. Why American Mobility Ground to a Halt Saudi Arabia's Neom Signs $5 Billion Deal for AI Data Center SpaceX Bid to Turn Texas Starbase Into City Is Set for Vote in May Cutting Arena Subsidies Can Help Cover Tax Cuts, Think Tank Says How to Build a Neurodiverse City Now, the Los Angeles wildfires are likely to add another financial burden to households across the state. A $1 billion assessment announced Tuesday for California's FAIR Plan, the state-mandated insurer of last resort, is expected to drive up premiums as companies will likely pass some of the costs onto homeowners. The charge, meant to help cover wildfire losses, underscores a broader crisis in California's housing market, in which rising risks from natural disasters, dwindling insurance options and intractable shortages are colliding to make homeownership even more expensive. Higher insurance rates are 'going to make the affordability challenges we already have, owing to chronic undersupply, even more challenging,' said Jordan Levine, chief economist for the California Association of Realtors. The FAIR Plan assessment comes after the Palisades and Eaton fires destroyed at least 11,000 homes last month, causing as much as an estimated $75 billion in insured losses. Under new state regulations, insurers must cover half of the FAIR Plan's initial $1 billion shortfall. Beyond that, they can shift all additional wildfire-related costs onto policyholders. Private insurers have already been factoring the assessment into their projected wildfire losses. State Farm, California's largest home insurer, has requested an emergency 22% rate increase to take effect May 1, which the regulator is now reviewing. Well before the latest blazes, California's housing market was under immense pressure, with an estimated shortage of 2.5 million units. Until now, scarcity has been a bigger driver of rising home prices than insurance costs, said Dave Jones, a former state insurance commissioner. 'Even though we've been seeing for the past five years tremendous increases in insurance prices and less availability of private insurance, that's not really having an impact on prices,' he said in an interview. 'Because the supply of homes in California is 2.5 million short that's a bigger determinant of price and is driving prices higher.' Single-family home prices in the state climbed 5% last year to a median of $861,000 — more than double the US level — with only 15% of households able to afford to buy a median-priced home, according to the California Association of Realtors. In Los Angeles County, where the median home price exceeds $900,000, that figure was just 11%. Mortgage payments in California now average $5,550 a month, including taxes and insurance, pricing out vast swaths of middle-class buyers. Insurance alone accounts for a relatively small fraction of that cost, at about $65 a month, according to Levine's estimates. The new assessment is expected to add at least $60 a household for the 8 million-plus owners with fire insurance. Future price hikes will depend on how insurers adjust to new financial strains and how they price in evolving wildfire risks. 'The assessment will likely lead to increased premiums or reduced coverage availability in the private market as insurers adjust to offset their increased liabilities from FAIR Plan contributions,' Fitch Ratings reported last month. The insurance costs won't be evenly distributed, adding another layer of inequity to a market already defined by its extremes, said Levine. The biggest strain may be felt by homeowners in fire-threatened areas, where private insurers have already begun retreating, leaving more homeowners reliant on the FAIR Plan. Over the past four years, the number of residential and commercial policies under FAIR has more than doubled to 450,000. But even in lower-risk areas, homeowners may be affected since private insurers operating all across California must contribute to the program's shortfalls. 'Low-income communities would essentially subsidize FAIR Plan coverage in high-fire risk areas, including vacation homes,' a state Assembly committee warned in 2023. 'Assessments, in the near and long term, could lead traditional insurers to further withdraw from the California market, which would mean even fewer voluntary market insurance options for customers, a higher concentration of risk covered by the FAIR Plan, and an acceleration of the looming insurance unavailability crisis for many Californians regardless of where they reside.' California established the FAIR Plan in 1968 as an alternative to commercial plans. Unlike private home insurers, who can turn customers down, the state-mandated program must take anyone who, through no fault of their own, can't obtain insurance otherwise. Every property insurer licensed in the state automatically becomes a member as a condition of doing business and is required to contribute to the FAIR plan based on its market share. By law, they may be called on to fund its continued operations in case of an extreme catastrophe. Insurance rates increased across Southern California after the 2018 Woolsey Fire, which burned 97,000 acres and destroyed 1,643 structures in Los Angeles and Ventura counties, prompting major insurers like Chubb and American International Group Inc. to drop coverage in fire-prone areas. Many owners of multimillion-dollar homes now piece together multiple policies to exceed the FAIR Plan's $3 million cap for rebuilding costs, lost possessions and temporary housing, said Beverly Hills real estate agent Tomer Fridman. Some are ditching single-family homes for condos, where fire insurance can fall under homeowners' associations. 'It's a big sticking point for all sellers and buyers,' Fridman said. 'It's affecting decisions.' Consumer Watchdog, an insurance industry monitoring group, has accused private insurers of offloading high-risk properties onto the FAIR Plan while selectively covering homes that are deemed less risky. 'Homeowners across California should not have to pay a penalty to repair the damage from home insurance companies' predatory behavior,' Carmen Balber, Consumer Watchdog executive director, said in a statement. California's leaders, including Governor Gavin Newsom, acknowledge the challenge of keeping private insurers in the state while ensuring coverage is affordable. They point to the state's relatively low insurance rates compared with Texas and Florida. Ricardo Lara, the insurance commissioner, recently pushed through a plan giving insurers more scope to increase rates in exchange for broadening coverage in wildfire zones, as part of an effort to stabilize the market. 'Thirty years of stagnant regulations have placed more people at risk,' Lara said in a statement on Tuesday. 'We will move people away from the FAIR Plan, and insurance companies will write more policies under the Sustainable Insurance Strategy I finalized last year.' --With assistance from Michelle Ma. 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