State Insurance Department Proposes A New Way To Protect Against The Effects Of Climate Change

The California Department of Insurance is proposing a new insurance model to provide more widespread protection from the effects of climate change.

In a report issued Thursday, it calls for insurance policies that state and local governments, community groups and homeowners associations could buy. The idea is to offer protection to everyone — even those who can't afford individual insurance — against sea-level rise, wildfires and extreme heat.

The policies could protect against climate-related disasters in ways as simple as helping people get an air conditioning unit, said State Insurance Commissioner Ricardo Lara.

"What about if we were able to then access insurance funds to be able to purchase these units for low-income folks? Or to be able to have greater open space, better tree canopies? All of this costs money," said Lara.

Lara said this new approach to insurance could empower communities to devise coverage to meet their needs as they navigate climate change.

A working group of government and insurance industry officials and environmentalists contributed to the state's report.

They were inspired by a group led by the government of the Mexican state of Quintana Roo, which bought insurance protection for reefs in 2019.