Sen. Sheldon Whitehouse of Rhode Island knows something about coastal communities — nearly his entire state qualifies for the description. So it was with heightened sensitivity and alarm that Whitehouse, Chairman of the Senate Budget Committee, presided over hearings on the coming catastrophe of general uninsurability of coastal properties and wildfire-adjacent properties.
That catastrophe is no longer imminent, but here, as Allstate insurance has said that worsening climate circumstances will force the major insurance company to stop writing new policies in California. “Our hearings in Senate Budget warned of this, ” Whitehouse laments, sharing the news.
Our hearings in @SenateBudget warned of this: coastal properties, wildfire-adjacent properties, and general uninsurability were the three hearings; collapse in insurance markets the common thread.https://t.co/l2mw6888yh
— Sheldon Whitehouse (@SenWhitehouse) June 5, 2023
Allstate, the #4 home insurer in California, made its announcement on the heels of a similar move by State Farm, California’s #1 home insurer. Florida has been hit by a similar withdrawal of insurance availability and services provided by big insurers.
Sen. Whitehouse shared more related news, connecting the insurance collapse to substantial drops in home prices. “And as we were warned in the Budget hearings,” Whitehouse wrote, “uninsurability affects mortgageability, which affects real estate prices — hence Freddie Mac warning of coastal property values crash.”
A 4.3 percent hit was reportedly manifest in listings of properties vulnerable to wildfire damage relative to similar properties with less risk, the discounted value mainly attributable to insurance acquisition challenges.
And as we were warned in the Budget hearings, uninsurability affects mortgageability, which affects real estate prices — hence Freddie Mac warning of coastal property values crash.https://t.co/54nCELzGC8
— Sheldon Whitehouse (@SenWhitehouse) June 5, 2023
These twin climate-driven developments in the California real estate and insurance markets come as no surprise to Senate Budget Committee members, Whitehouse says.
The Senate Budget Committee includes Ranking Member Chuck Grassley, Lindsey Graham, Bernie Sanders, Patty Murray, Mitt Romney, Rick Scott of Florida and Alex Padilla of California, among other veteran lawmakers.
