As property insurance crisis worsens, some lawmakers target Big Oil

Desperate to get a handle on rising property insurance costs driven by natural disasters, some state lawmakers are opening up a new line of attack in the effort to force oil companies to bear the cost of climate change effects. 

In three states, Democratic lawmakers introduced bills this session that would allow insurance companies or state attorneys general to take action against oil companies to offset the rising costs of insurance. 

While none of the measures became law this session, they signal the increasing urgency in states where wildfires, floods and other disasters have driven up the cost of insurance premiums and led some insurers to stop writing new policies. 

The proposals follow other state-led efforts to demand payment from fossil fuel producers for the mounting damages caused by climate change. States and municipalities have filed more than three dozen lawsuits over the industry’s role in the climate crisis, claiming companies violated a variety of laws, including consumer protection, public nuisance, failure to warn, fraud and racketeering.

Meanwhile, a handful of states have passed or introduced “climate Superfund” bills that use attribution science — a new field of research — to calculate the cost of disasters and charge fossil fuel companies for their role in causing them. 

Those efforts have drawn fierce opposition and legal challenges from oil companies and conservative groups. 

Now, some Democrats are using a similar premise to try to put large oil companies on the hook for the fast-growing insurance crisis. 

In many states, property insurance costs have skyrocketed as insurance companies have paid out increasing claims for wildfires, hurricanes and floods. Some insurers have stopped writing policies in certain areas. 

California and some other places have seen a surge of new policies on state-backed “last resort” insurance plans after residents failed to find coverage on the private market. California’s program, known as the FAIR Plan, was hit with billions in losses and sought a massive rate hike following the Los Angeles wildfires in 2025. 

A bill in California would empower the state attorney general to sue fossil fuel companies to recover insurance costs. That measure failed to advance out of committee last month, with Republicans and some Democrats expressing concerns about fuel prices among other issues. 

A bill in Hawaii would allow insurance companies to seek damages from fossil fuel companies for their role in causing disasters worsened by climate change. Any proceeds gathered from actions against polluters would be factored into insurance rates. 

The bill passed both the House and Senate, but failed to advance when a conference committee ran out of time before a deadline earlier this month, the Honolulu Star-Advertiser reported. 

“[T]he largest oil and gas corporations, who knowingly contributed to the drought conditions that made the Maui fires worse, pay nothing while continuing to rake in billions of dollars in profit every year,” Democratic state Sen. Jarrett Keohokalole wrote in a Honolulu Civil Beat op-ed. “Hawaiʻi taxpayers should not be forced to foot the bill for Big Oil’s deception.”

Meanwhile, a similar bill in New York, allowing both insurance companies and the state attorney general to take action against oil companies over insurance costs, has been introduced but has not yet had a hearing in committee.

As with all legislation targeting the fossil fuel industry, the insurance bills have encountered fierce opposition and powerful lobbying campaigns. If enacted, the proposals would undoubtedly face lawsuits. Fossil fuel companies have long argued that they extracted and sold their products while following a suite of federal regulations, insulating them from state claims of harm. 

States have countered that the companies knew about the dangers of climate change but lied to the public, noting the successful campaign to hold tobacco companies accountable for deception even though their products were sold legally. 

Stateline reporter Alex Brown can be reached at abrown@stateline.org.