Discover Beautiful Rhode Island welcome sign. Credit: Paul Brady/Adobe Stock
A new bill in Rhode Island would encourage insurers to recoup climate change costs by taking oil companies to court.
House Bill 7752, sponsored by Rhode Island Rep. Terri-Denise Cortvriend, aims to address home insurance challenges in the state. As seas rise and coastal flooding increases, home insurance is becoming more expensive and harder to get.
According to NerdWallet, the average home insurance policy costs $2,230 in Rhode Island, but prices can be much higher for coastal homes. Prices have increased significantly over the last five years, with spikes of 25% to 40% depending on the area. Some carriers have reduced their presence in the state or halted new home insurance in high-risk areas.
The bill would create legal cause of action for insurers to recover losses from climate disasters from oil and gas companies instead of passing those costs along to consumers. Any funds recovered by insurers through judgment, settlement or subrogation would have to be considered in rate filing to offset losses or reduce future rate hikes.
"We know now that fossil fuel companies have known for much longer than they've disclosed to the public — much like the tobacco industry — that their products are harmful to the public," said Cortvriend, at a Feb. 26 legislative hearing. "Right now ratepayers are paying more for insurance, the government is paying more for repairs, and individuals are paying more. The only people that aren't paying is Big Oil."
In a letter to the state house, the Northern Rhode Island Chamber of Commerce voiced concerns about the bill, saying it raises substantial legal and economic concerns.
Monika Zuluaga, the chamber's president and CEO, wrote that natural disasters have been part of Rhode Island's history for a long time, and the bill would represent "a dramatic expansion of traditional tort principles." The bill, she said, also appears to create potential liability for oil and gas emissions that occurred decades before, when those activities were lawful and in compliance with regulations at the time.
On the insurance side, "the bill's provisions allowing insurers to seek recovery for climate-related losses could significantly expand claims exposure in ways that are difficult to quantify or trace," Zuluaga wrote. "This may contribute to higher premiums, reduced coverage availability, or additional instability in an already strained insurance market — affecting both businesses and homeowners."
Photo credit: Paul Brady/Adobe Stock
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