Hawaii’s legislature has passed a resolution urging property insurers operating in the state to consider pursuing subrogation claims against fossil fuel companies to offset rising insurance costs for residents.
The nonbinding measure does not name specific companies but refers to certain entities in the fossil fuel sector as "polluters." It links climate-related damages in the state to rising carbon emissions and attributes those emissions to long-standing industry practices.
The resolution asserts that warming sea and air temperatures are intensifying weather patterns, including hurricanes and droughts, and contributing to overall climate instability in Hawaii.
It also states that some fossil fuel producers have been aware of their role in climate change for decades and accuses them of engaging in misleading or deceptive conduct related to the impact of their products.
According to the text of the resolution, climate-related harms present risks to the safety and well-being of Hawaii residents and visitors. It says injured parties should have the opportunity to be made whole through recovery efforts.
The legislature calls on local insurers, including the Hawaii Property Insurance Association, to evaluate the potential for subrogation actions against fossil fuel companies. The aim is to recover costs associated with climate-related damage and reduce the burden of insurance expenses on policyholders across the state.
Currently, there is no established precedent for insurers successfully pursuing subrogation claims against oil companies for climate-related damages.
However, Hawaii’s resolution echoes that of a bill passed by California earlier this year, suggesting a growing interest in the proposal. Senate Bill 222, introduced by state Sen. Scott Wiener, proposes allowing insurance companies and policyholders to sue fossil fuel companies to recover costs associated with climate-induced disasters.
Several major insurers, including AIG and Chubb, continue to provide coverage for oil and gas operations. Chubb, for instance, has expressed intentions to underwrite more oil and gas production, aligning with anticipated increases in fossil fuel activities under the current US administration.
However, the company iterated that it maintains certain environmental standards, such as methane emission caps and restrictions on insuring high-emission projects like oil sands developments.
AIG, despite facing criticism for its investments in oil and gas companies, has not publicly disclosed plans to reduce its exposure to the fossil fuel sector.
Conversely, several insurers have begun to scale back their involvement with the oil industry. Generali announced in October that it would cease providing new coverage for midstream and downstream oil and gas projects, including liquefied natural gas terminals and gas-fired power plants.
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