A bill introduced in the Hawaii Senate would allow insurers to subrogate claims against entities held responsible for worsening climate impacts that affect insurance rates, according to a report from Best Wire.
Senate Bill 178 relates rising sea and air temperatures caused by increasing carbon emissions to more frequent and severe weather events that disrupt insurance markets. The bill also states that insurers should be able to recover costs from the fossil fuel industry, similar to how they have previously pursued claims against tobacco companies, entities linked to the opioid crisis and other parties associated with broad financial damages affecting insurance premiums.
Sen. Chris Lee, a Democrat representing District 51 and the bill’s primary sponsor, said scientific research has linked more severe weather events to climate change and rising 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 said that, if enacted, the law would likely be the first of its kind in the US. However, similar proposals have been introduced in other states. In January, a bill was introduced in the California Senate that would grant policyholders and insurers the ability to file civil suits against fossil fuel companies.
He expects debate over the proposal but noted that Hawaii lawmakers from both parties have historically supported climate-related measures.
Hawaii was the first state to commit to 100% clean energy and set a goal of becoming carbon negative across its entire economy, a measure that passed with bipartisan support, Lee said. He also noted that beyond rising insurance premiums, coverage is being reduced for certain 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."
In January, Hawaii lawmakers started a new legislative session with a vow to try to stabilize the state’s property insurance market following hurricanes, wildfires, and other climate change-influenced disasters, as insurance companies increasingly view Hawaii as a disaster risk state even before the Maui wildfires in August 2023.
The Hawaii Insurers Council did not provide a comment on the bill.
