Hawaii Bill Targets Fossil Fuel Industry for Climate-Related Insurance Costs
A bill currently under consideration in the Hawaii Senate could allow insurance companies to pursue claims against entities deemed responsible for contributing to climate change, according to a report from Best Wire.
Senate Bill 178 directly links rising sea and air temperatures, caused by increasing carbon emissions, to the frequency and severity of weather events that disrupt insurance markets. The legislation proposes that insurers should be able to recoup their costs from the fossil fuel industry, drawing a parallel to how they’ve previously sought damages from tobacco companies and other parties associated with significant financial losses influencing insurance premiums.
Sen. Chris Lee, a Democrat representing District 51 and the bill’s primary sponsor, cites scientific research connecting more extreme weather events to climate change and escalating ocean temperatures. “Our people, our families and our businesses are now paying the price, and the cost of insurance is skyrocketing,” Lee said. “It seems entirely natural to have our insurance companies recover costs from those who knowingly contributed to making those conditions worse and driving these events.”
Lee believes that if enacted, the law would likely be the first of its kind in the United States. Similar measures, however, have been proposed in other states. In January, for example, a bill was introduced in the California Senate that would permit policyholders and insurers to file civil suits against fossil fuel companies.
While anticipating debate over the proposal, Lee noted that Hawaii lawmakers from both parties have historically supported climate-related initiatives. Hawaii was the first state to commit to 100% clean energy and has a goal of becoming carbon negative across its entire economy, a measure that passed with bipartisan support, Lee pointed out. He also observed that beyond rising insurance premiums, coverage is becoming more restricted for specific areas and risks.
“It is really turning into a crisis situation that is affecting people’s ability to get mortgages and having a cascading effect throughout the economy,” Lee said. “If it continues this way, it will have a significant impact on the state overall over the next few years.”
Lawmakers in Hawaii began the current legislative session with a pledge to address the stabilization of the state’s property insurance market, particularly in the wake of damage inflicted by hurricanes, wildfires, and other climate change-influenced disasters. Insurance companies are increasingly viewing Hawaii as a high-risk state, even before the devastating Maui wildfires in August 2023.
The Hawaii Insurers Council did not provide a comment on the bill.
