Document Type



Georgia Law Review




Climate change is fundamentally destabilizing the private insurance industry, with many high-profile insurance companies exiting states in the face of catastrophic, climate-induced risk. This rapid “insurance retreat” represents a major market signal in response to climate-exacerbated risks. Private businesses are making actuarial decisions, assessing that some locations are just too vulnerable to insure. At the same time, this insurance retreat also poses a policy challenge for states as they react to the mounting insurance gaps left by exiting private insurers.

This Article analyzes insurance retreat, its attendant policy challenges, and the lessons that can be drawn from state responses. It first describes the causes and effects of private insurance retreat. Then, the Article examines different potential policy responses to insurance retreat, including interventions modeled after the federal National Federal Insurance Program (NFIP) as well as state insurance programs in California, Florida, and Louisiana. Finally, the Article offers a comparative analysis of these different policy response options. It observes that existing policies differ substantially along two important dimensions: 1) extent of government intervention, and 2) prioritization of physical risk concerns versus financial transition concerns. It also explores how the different state programs show surprisingly diverse policy approaches and how—contrary to assumptions—many do not actually subsidize insurance affordability. Through these observations, the Article uncovers unexpected examples of state insurance policies complementing, rather than contravening, pricing signals sent by private insurance retreat.