Natural disasters are becoming an everyday threat in the United States. But the consequences extend far beyond immediate damages. From wildfires to floods, climate change is harming the systems that protect homeowners and renters.
Several Berkeley Social Sciences researchers gathered at the Social Science Matrix recently for a panel discussion to examine how climate change, urban planning and insurance instability are currently reshaping the nation’s housing landscape.
The “Financializing Disaster: Insurance and the Climate Crisis” event discussed how extreme weather events, rising insurance and financialized housing markets intersect to create a crisis of both security and equity.
Geography Chair Desiree Fields, a panelist who studies how property reproduces inequality, highlighted how homeownership in the U.S. functions as a form of privatized social protection and how it intersects with climate risk.
“Wildfires, hurricanes and floods have all intensified in frequency and severity, and with that comes increasingly high insurance costs,” she said. “While the U.S. home ownership rate is around 65%, our most valuable asset is both increasingly vulnerable to the impacts of climate change and increasingly unsustainable to insure.”
Fields also cited geographical research on structural inequities in climate finance, which shows that “climate finance in the U.S. is structurally biased in favor of shoring up the value of conventional single-family homes, while excluding or exploiting owners of manufactured homes and renters in multi-family dwellings.”
Panelist Dave Jones, a former California Insurance Commissioner and director of the Climate Risk Initiative at the Center for Law, Energy & the Environment at UC Berkeley School of Law, described the growing instability in the insurance sector.
“Global temperature rise is causing more frequent and severe weather-related events,” Jones said. “They are killing more of us, injuring more of us, and damaging more property. Insurers are responding by raising premiums, cancelling policies and sometimes leaving the market entirely.”
Fields emphasized how financial systems and policy decisions make these risks worse. “This regime of asset price inflation makes housing less and less affordable for people,” she said. “Municipal governments are stuck in a loop: rising property values increase revenue but limit their ability to expand affordable housing.”
She said this results in more residents being pushed into vulnerable areas, where cities often lack the resources to invest in climate risk protections, leaving communities more exposed to wildfires, floods and other disasters.
The panel also explored how climate adaptation policies and insurance practices often favor wealthier homeowners. Fields described the concept of “real property supremacy,” in which protections like insurance subsidies or infrastructural improvements tend to go to wealthier homes, excluding mobile home owners and renters.
“Owners of mobile or manufactured homes are much more vulnerable to predatory finance if they want to weatherize their property,” she said. Renters often bear the cost indirectly, through high rent, utility bills and increased insurance premiums.
Berkeley City & Regional Planning Professor Stephen Collier discussed how the insurance crisis is driving urban adaptation to climate change by forcing both city governments and residents to confront changing risks. He described divergent pathways of adaptive change being shaped by insurance.
Foster City, a town south of San Francisco, has responded to the prospect of rising flood insurance rates by reinforcing its seawall, ultimately saving residents thousands of dollars in premiums, and securing the city’s strong bond rating.
Meanwhile, the town of Paradise, which was devastated by the Camp Fire in 2018, has experienced a “disorderly” process of adaptation as it has been buffeted by rapidly increasing premiums and declining availability of insurance that have presented a major barrier to post-fire recovery.
Jones argued that solving the insurance crisis requires tackling climate change at its core, by turning away from fossil fuels and reducing emissions to bend the curve in regard to global temperature rise.
Fields linked climate risk to deeper structural inequities. “The insurance crisis and climate finance more broadly is really entangled with these deep currents of property relations and social and economic policy in the U.S.,” she said. “Addressing climate risk requires addressing inequality at the same time.”