Homeowners Sue Oil Companies as Climate Damage Drives up Insurance Rates
By Dana Drugmand
This article originally appeared on Inside Climate News, a nonprofit, non-partisan news organization that covers climate, energy and the environment. Sign up for their newsletter here.
Two homeowners in Washington state who have seen sharp increases in their home insurance premiums in recent years have brought a new lawsuit against major oil and gas companies—the first of its kind aiming to hold Big Oil responsible for climate-related spikes in insurance costs.
The case, filed last week in U.S. District Court in the state’s Western District, alleges that deception and fraud on the part of oil industry defendants around the impacts of fossil fuels on climate has substantially contributed to the climate crisis, which in turn has resulted in a homeowners’ insurance crisis as rates soar and access in especially high-risk areas starts to decline.
In Washington state, for example, homeowners’ insurance rates have risen by 51 percent over the last six years.
For Richard Kennedy, a resident of the Seattle suburb of Normandy Park, premiums have more than doubled since 2017, rising from $1,012 to $2,149. Margaret Hazard, who resides in Carson, Washington, has similarly experienced a doubling in her homeowners’ insurance premiums over the last eight years. They are now turning to the courts, filing a class action on behalf of all homeowners who have or will purchase insurance after the year 2017 in both that state and nationwide.
Climate change, which is supercharging damaging extreme weather such as hurricanes, flooding and wildfires, is a key factor driving rising home insurance rates. As climate-related disasters and their associated costs mount, homeowners’ insurance is becoming costlier and harder to obtain, according to a January report from the Department of the Treasury’s Federal Insurance Office. The report found that average home insurance premiums increased nearly 9 percent faster than the rate of inflation from 2018 to 2022.
The lawsuit, Kennedy v. Exxon et al., is the first to target fossil fuel companies over these skyrocketing insurance costs. “This case is about holding the fossil fuel defendants accountable for the increased homeowners’ insurance premiums that their coordinated and deliberate scheme to hide the truth about climate change and the effects of burning fossil fuels has brought about and for their conduct contributing to climate change,” the complaint asserts.