Lawsuit blames Big Oil for climate-driven insurance rate hikes

Image shows a tanker on the water. — A pair of Washington state homeowners say oil companies bear responsibility for rising homeowner's insurance rates.

By John Hilton

Washington state homeowner’s insurance rates increased by 51% over the past six years. In a new lawsuit, a pair of residents say oil companies are to blame for driving climate change.

Filed Nov. 25 in the U.S. District Court for the Western District of Washington, the lawsuit seeks class action status and names Exxon Mobil, Shell, Chevron, ConocoPhillips, and the American Petroleum Institute as defendants.

The companies, states the lawsuit, “were well aware of that climate change associated with the sale of fossil fuel products would result in extreme weather events and rising sea levels, and they invested heavily to protect their own assets, infrastructure, and operations from them and invested to continue and expand their conduct that was contributing to climate change.”

Richard Kennedy of Normandy Park, Wash., and Margaret Hazard of Carson, Wash., are the plaintiffs and are represented by Hagens Berman, an international law firm with Seattle offices.

Climate impacts

Citing a January report from the Department of the Treasury, plaintiffs note that, from 2018 to 2022, the annual number of major disaster declarations for climate-related events was almost double the annual average over the 50-year period from 1960 to 2010.

In 2023, U.S. natural catastrophes cost an estimated $114 billion, of which approximately $80 billion was insured, the lawsuit said. Through the first three quarters of 2024, natural catastrophes caused $145 billion in economic losses, of which nearly $80 billion was insured.

“These baseless lawsuits are a coordinated campaign against an industry that powers everyday life, drives America’s economy, and is actively reducing emissions,” said Ryan Meyers, senior vice president and general counsel for the API. “We continue to believe that climate policy belongs in Congress, not a patchwork of courtrooms.”

Federal courts have not ruled on the merits of whether oil companies can be held liable for climate change. They’ve mainly ruled on jurisdiction. Historically, federal courts have dismissed climate tort claims as raising political or policy issues outside judicial authority.

113% insurance increase

Kennedy said his homeowner’s insurance premiums totaled $1,012.10 in 2017, the lawsuit said. By 2022, that bill rose to $2,149.18, an increase of approximately 113%.

“Plaintiff was unaware of Defendants’ misleading and deceptive acts concerning the true impact their practices had on climate change and the related increase in his insurance premiums based on this wrongdoing,” the lawsuit reads.

Hazard’s homeowner’s insurance premiums also more than doubled, the lawsuit said, and she recently had to switch to a different policy with less coverage, “which is concerning because she lives in [an] area that is very dry and prone to forest fires.”

Homeowner's insurance is rising in many states due to the effects of climate change.

The oil companies have known since at least the 1960s, based on their own internal scientific research, that carbon dioxide and other greenhouse gas pollution caused by the unchecked sales of its highly profitable petroleum products would inevitably lead to “catastrophic” weather-related consequences, the lawsuit claims.

The results would cause “considerable significance to civilization” and the defendants knew that “only a narrow window of time existed in which to act before severe consequences would result,” plaintiffs says.

“They were well aware ... that climate change associated with the sale of fossil fuel products would result in extreme weather events and rising sea levels, and they invested heavily to protect their own assets, infrastructure, and operations from them and invested to continue and expand their conduct that was contributing to climate change,” the lawsuit says.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.