Some insurance companies and lenders are reducing their risks to flooding, wildfires, and other natural disasters that could be worsened by climate change. The move is likely to increase the financial burden on state and federal governments, and then taxpayers, after disasters.
As losses from natural disasters expand, insurance companies have retreated from risky areas. Homeowners in large parts of Florida, Texas, and California must now rely on subsidized state programs that are struggling to maintain financial sustainability. Experts say the risk shift does not address the underlying issue of properties vulnerable to disaster and may lead to a financial crisis.
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