Climate Change Breaks Insurance System, Leaves Families Stranded

Four years after Hurricane Ida destroyed their Louisiana home, Jennifer and Dean Bye are still living in a construction zone with mold-stained walls and bare concrete floors. Their insurance company, FedNat, collected premiums for years before going bankrupt, leaving the family to fight for a $450,000 payout they’re still waiting to receive.

The Byes’ story illustrates a growing crisis across America: climate change is breaking the insurance system. Between 2018 and 2023, insurance companies dropped 1.9 million policies in disaster-prone states like Florida, Louisiana, California, and Texas. Many insurers simply went bankrupt after facing massive losses from increasingly severe storms, wildfires, and floods. In Louisiana alone, 11 insurance companies collapsed between 2021 and 2022.

This creates a vicious “cycle of doom,” as experts call it. When private insurers fail or flee, homeowners get pushed onto expensive state-run insurance programs designed as last resorts. These programs struggle under the growing demand, driving up costs for everyone and making the insurance business even less attractive to private companies.

Meanwhile, Americans continue moving into high-risk areas despite the mounting dangers. Counties prone to floods and fires have actually gained residents in recent years, while safer areas have lost population. Without major policy changes to limit development in dangerous zones and help communities adapt to climate risks, the insurance crisis will only worsen—leaving more families like the Byes trapped between unlivable homes and unaffordable coverage.