Robert Sulnick: State Farm Insurance Taking Leadership Role Against Climate Change

De facto leadership in the fight against climate change is no longer an oxymoron. Enter State Farm and Arizona.

State Farm, the largest insurer in the United States, recently announced it has stopped accepting new home insurance applications in California, including the local markets of Montecito, Santa Barbara's foothills above Highway 192, and Rancho Embarcadero west of Goleta.

Its explanation was … "rapidly growing catastrophic exposure and a challenging reinsurance market." In other words, California wildfire claims.

Meanwhile, Arizona — facing a major groundwater shortage and severe drying in the Colorado River, where it gets 36% of its water — announced it will curtail new development permits … "unless developers can show they can get water from elsewhere" (wherever that might be in the drought-stricken West).

When a state with a population of nearly 40 million has its home insurance options curtailed by two leading insurance companies (Allstate also stopped issuing new polices) because wildfires "represent extreme weather patterns, only getting worse," it's the kind of wake-up call the country and the world must pay attention to.

And when a state in the heart of the Southwest's 23-year megadrought has to acknowledge the relationship between lowered water levels in the Colorado River and its relationship to increased pumping threatening underground water sources, this, too, has to be a wake-up call.

Climate change is not going away. Due to global government inaction, it is only getting worse.

Over the past five years, wildfires have destroyed 25,000 homes in California. In 2018 alone, Californians filed $11.7 billion in wildfire-related claims.

In 2022, there were 7,677 wildfires in California that burned more than 363,939 acres, killed nine people and destroyed 772 structures.

The Colorado River supplies water to more than 40 million people in seven states (California, Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming) and Mexico.

The federal government, because of the megadrought in the West, previously cut river supplies to Arizona (21%), Nevada (8%) and Mexico (7%).

Now, Arizona, in a voluntary agreement with California and Nevada, is cutting at least an additional 3 million acre-feet by 2026; 1.5 million acre-feet next year. An acre-foot equals about 32,000 gallons, or enough water to cover an acre, about the size of a football field, one foot deep.

Because of our warming climate it is a certainty that there will be more wildfires and drought.

The fact that State Farm and Arizona figured out that their resources — financial and natural, respectively — are not sustainable in this context should be seen as a hopeful sign in the struggle to arrest global warming.

It's clear that our national government, where the change should come from, is not going to address this existential threat without public pressure.

Climate change ranks 17th out of 21 as an important national issue, well behind the economy and reduced health care costs.

This, along with 67% of Americans surveyed saying the country should use a mixture of renewables and fossil fuels, would seemingly spell more climate disasters unless there is a substantial climate intervention.

State Farm and Arizona may have begun that intervention.

Despite the winter rains in Arizona, decades of overuse and climate change continue to propel the Colorado River toward "dead pool" status, in which the water level is too low to flow into the downstream dams at Lakes Mead and Powell, which service populations dependent on the water.

And despite the "atmospheric rivers" of rain that California experienced last winter, wildfire experts predict up to 1 million acres will burn in the state this fire season. Along with the rains came massive storms that blew down thousands of trees, which now are fuel for fires.

While we and our politicians may avoid looking at this, these facts have not been lost on either the insurance industry or state regulators.

Money and water may be seemingly strange bedfellows, but fire and water have brought climate change into focus like no amount of proselytizing could. Nature teaming up with private industry can be a successful climate partnership.

Climate change will continue to exacerbate wildfires and drought. It will also continue to present overwhelming financial challenges to the insurance industry and those tasked with regulating water — a disappearing natural resource.

Indeed, these two strange bedfellows might even cause both the public and elected officials to follow their lead and join the fight against our rapidly overheating planet.

The post Robert Sulnick: State Farm Insurance Taking Leadership Role Against Climate Change appeared first on Noozhawk.