The Vermont Department of Financial Regulation (DFR) has released a report examining the ongoing impact that climate change is having on those living in the state and the insurance companies that provide the coverage. The report found that climate trends are making Vermont’s climate warmer and wetter which is also leading to an increase in severe weather more likely to cause greater property damage. Specifically, hailstorms accounted for the most property damage in terms of total loss, followed by gradient wind and thunderstorms. The report suggests that these types of weather events tend to increase in a warmer, wetter environment. The report concluded these climate trends are expected to continue over at least the next 30 years, which will lead to an increase in the frequency and intensity of severe weather. In addition to those who will be directly impacted by property damage, all Vermonters could experience an indirect impact through rising homeowner and auto insurance rates. Vermont commissioner Michael Pieciak says: “Financial regulators have an important role to play in helping reduce and mitigate the impacts of climate change on Americans. The financial entities we regulate collectively hold over $220 billion in assets that could both be vulnerable to climate risks and used to encourage greener practices that will reduce risk for consumers.” The report was completed in conjunction with, and based on original research conducted by, Northview Weather, a Vermont weather modelling and forecasting firm with expertise in extreme weather events. From the report findings, the Vermont DFR has committed to join the Sustainable Insurance Forum, an international group of insurance regulators committed to sharing information and solutions that would help reduce and mitigate the impacts related to climate change. In addition, it has revealed its intentions to Annually administer the Insurer Climate Risk Disclosure Survey — developed by the National Association of Insurance Commissioners — to its domestic insurance companies to help assess the systemic risk presented by climate change. The DFR also said it will develop guidance to address climate-related financial risks and support the development and marketing of innovative insurance products and services that support a reduction in greenhouse gas emissions. Commissioner Pieciak says he welcomes input from those within the state concerning other measures the department should consider.
