How Does Climate Change Affect Car Insurance?

Andrew Koole
· 4 min read
The signs of global warming are all around us. From the annual onslaught of forest fires in
to the growing number of tropical storms reaching farther north than ever before, the reality that our climate is changing becomes more undeniable every year.
For people living in regions directly affected by the rise in extreme weather, the threat outside their door can’t be ignored. But for others, it might seem hard to see how
climate change
affects their daily lives.
But it does, and one way it does is through rising insurance premiums. You might think that insurance costs will only rise in the regions most affected by the climate crisis, but you would be wrong. Experts say prices will go up for everybody.
Climate change has a hidden impact on almost everything.

Why does climate change raise insurance rates?

Insurance companies base their rates on risk. The more likely that a claim will be made, the higher the policy will cost. So it should come as no surprise that extreme weather caused by global warming will make insurance more expensive for those living in highly affected regions.
But as those extreme conditions become more regular, the burden of risk becomes too heavy for the areas most affected.
Take California, for example. If location were the only thing determining insurance prices, counties surrounded by forests would become too expensive to live in. The cost of owning a home or a car would go through the roof.
To avoid this, insurance companies and regulators spread a percentage of the costs over all policyholders. That means rates increase no matter where you live.
New York Times
says this will be harder to navigate as climate change gets worse, but for now, it’s how the industry balances the scales.
MORE: What Should You Do If You’re Caught Driving in a Flood?
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What else are insurance companies doing to curb the cost of climate change?

Despite what you may think, insurance companies want their premiums to stay affordable. Just like any product, if the price gets too high, people opt out. Or, if they need it, they choose the cheapest product available. That’s not good for business.
To help steady the boat rocked by climate change, the
Insurance Information Institute
says companies are initiating change and promoting strategies to curb the crisis. From sponsoring research to putting pressure on politicians, insurers are working to build a sustainable future.
Companies are also adapting to the current environment, offering discounts for insuring green products like electric cars and designing new products like usage-based car insurance to lessen the effect of your zip code on your premiums.

How to save on car insurance

MORE: How to Keep Your Car Safe in South Florida's Climate
You might not be able to avoid the effect climate change has on your
car insurance
, but there are plenty of other influences raising your premiums that you do have control over. From how often you pay to what car you drive, there’s an option that will keep insurance costs down.
If you want to save money on car insurance, the
app is a good place to start. A licensed broker, Jerry does all the hard work of finding the cheapest quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the top insurance app in the country.

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