While the state is facing record-melting heatwaves, State Farm wants to increase insurance rates, which would “affect millions of California consumers”
Death Valley’s Deadly Heat
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If weather forecasters are to be believed, this weekend could see Eastern California’s Death Valley either tie or shatter a heatwave record.
This comes after the National Weather Service’s Chris Outler reports that Death Valley National Park could sizzle up to 130 degrees by next week.
Hell on Earth?
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According to Scientific American, should it exceed 130 degrees, Death Valley will hold the record for the hottest temperature ever “reliably measured on earth”.
Speaking to USA Today, Outler said “The threshold is certainly not out of the realm of possibility”.
A Sweltering Summer
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The current predictions are that Death Valley will hit 127 degrees by Saturday, jump two degrees by Sunday, and then (according to a 20% chance) increase to 130 degrees.
Don’t Forget Coachella
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Although Coachella Valley is about 300 miles south, its residents might also suffer some excessive temperatures, as predictions point to about 11 straight days with temperatures of at least 115 degrees, the Desert Sun (which forms part of the USA Today Network) reports.
Melting Heat Records
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The weather service warns that would smash the former record of nine days of at least 115 degrees which was set in 2021.
And in the Central Valley, Fresno is expected to reach 115 degrees by Saturday, which will tie a current record.
What Will It Cost?
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California Insurance Commissioner Ricardo Lara has released an in-depth report, named “Impacts of Extreme Heat to California’s People, Infrastructure, and Economy”.
Described by Lara’s team as pioneering, the report examines the uninsured and insured costs related to the state’s extreme heat events while emphasizing the crucial need for adaptive strategies that can combat the rising threat of extreme heat.
Billions?
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Based on Lara’s report, the increasing cost of the seven heat events examined is originally estimated at $7.7 billion. The study also found that labor productivity losses fluctuated between $7.7 million to $210 million per event due to extreme temperatures, with considerable uninsured wage losses.
Damaging Infrastructures
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In addition, infrastructure costs because of heat-related damage and delays varied between $3.8 million to $35 million per event, with roads and railways mostly affected.
People’s Health
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It was also found that health outcomes disproportionately affected Black-, Hispanic-, and Native American communities, with substantial death rates and heat-related illnesses reported.
A Silent Killer
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According to Lara: “Extreme heat is a silent, escalating disaster that threatens our health, economy, and way of life in California. This report brings to light the staggering hidden costs of extreme heat events, underscoring the urgency of our efforts to create a groundbreaking heat wave ranking and early warning system statewide”.
Heat Protection?
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Lara continued: “We must prioritize resilience-building efforts and innovative insurance solutions to safeguard our state against the growing impacts and financial risks of extreme heat.”
Mind the Gap
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Although certain insurance types, like health cover, workers’ compensation, and crop insurance, offer some protection, there are still substantial gaps in traditional insurance coverage when it comes to heat-related losses.
Lara’s report emphasizes the need for innovative insurance mechanisms and expanded investment in adaptation and resilience.
Hiked-Up Rates
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Lara is also questioning the recent request of insurer State Farm General’s notable insurance rate increase – a move which Lara states does “raise serious questions”.
The Biggest in Seven Years
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State Farm is seeking to boost homeowners’ rates by 30%, 36% for condo owners, and 52% for renters. Should these increases be approved, it would mark the most substantial increase for the company over a seven-year timespan.
Impacting Millions
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According to Lara, “This has the potential to affect millions of California consumers and the integrity of our residential property insurance market.”
To Be Investigated
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Lara says he and his team want to “get to the bottom” of State Farm’s financial position, which is why they will conduct an in-depth review before deciding on the applications.
What’s Happening?
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This comes after State Farm announced earlier this year that about 30,000 homeowners’-, rental dwelling-, and other property insurance policies won’t be renewed as part of the company’s partial withdrawal from the California market.
About 42,000 commercial apartment policies are also facing non-renewal.
Wake up and Smell the Heat
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Referring to the report drawn up by Lara and his team, Kathy Baughman McLeod, chief executive at Climate Resilience for All and member of the California Climate Insurance Working Group, has stated: “The data presented in this report is a wake-up call that we need immediate measures to protect lives. The far-reaching consequences of extreme heat require coordinated action across all sectors to accelerate equitable adaptation”.
Getting Worse…
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California’s State Director at Environmental Defense Fund Katelyn Roedner Sutter also said: “As climate change intensifies, the costs of extreme heat on our health, lives, and economy are growing. It’s absolutely critical for California to monitor and reveal the enormity of otherwise hidden costs”.
Action Must Be Taken
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Sutter also added: “Anyone who says California cannot afford climate action should flip through this report to learn why doing nothing is not an option”.
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