A building goes up in flames during the Palisades Fire in the Pacific Palisades neighborhood of Los Angeles on Jan. 7. The Los Angeles wildfires were still smoldering as President Donald Trump began undoing climate crisis directives put in place by the Biden administration. January’s fire weather, influenced by climate change, fueled the destructive Palisades and Eaton wildfires that ravaged nearly 40,000 acres of land and destroyed tens of thousands of homes across L.A. By March, Adam Smith, the lead researcher for the Billion-Dollar Weather and Climate Disasters program at the National Oceanic and Atmospheric Administration, was analyzing the extensive costs of the L.A. wildfires when he was instructed to cease all communication on his findings.
Smith’s team regularly updated an online database tracking losses from over 400 natural disasters since 1980, each causing over $1 billion in damages. Following the L.A. wildfires, Smith was barred from publishing or sharing preliminary estimates that pegged the damages at over $50 billion. In early May, Smith resigned over concerns that NOAA intended to retire the disaster database he had built over 15 years. NOAA confirmed this decision shortly after, citing shifting priorities and staffing changes as reasons for discontinuing the database. This move left the official cost of the L.A. wildfires undisclosed, removing a key resource used by scientists, citizens, and insurers to assess climate risks.
The loss of the database is particularly concerning as billion-dollar disasters, such as hurricanes and wildfires, become more frequent. In 2023, the U.S. experienced a record 28 billion-dollar events, as recorded in the now-archived database. Climate-driven extreme weather events have become more common in recent years, with the U.S. averaging about 24 billion-dollar disasters annually compared to only three per year in the 1980s.
Researchers attribute the rise in extreme weather to global temperature increases, leading to prolonged droughts and heightened wildfire risks in the western U.S. Warmer temperatures are also contributing to wetter, more intense storms and hurricanes across the country. The surge in extreme weather is a significant concern for the insurance industry and policyholders in disaster-prone areas, with rates soaring in hurricane-hit states like Louisiana and Florida, where annual premiums can reach nearly $10,000. California is grappling with a surge in wildfires and other climate-related challenges, underscoring the urgent need for preparedness and data to understand and mitigate these risks.
The insurance industry is facing a crisis due to major insurers like State Farm withdrawing from insurance policies in response to increased fire risks. According to research by the National Bureau of Economic Research, climate-vulnerable households may see a $700 increase in annual premiums over the next three decades due to growing disaster risks. A report by Munich Re revealed that natural disasters led to a record $140 billion in insured losses worldwide in 2024.
Carly Fabian, a policy advocate at Public Citizen, emphasized that the costs of climate change are impacting consumers directly through their insurance premiums. The insurance industry is struggling to cope with the frequency of large disasters, as evident from the billion-dollar disaster database maintained by NOAA, which is crucial for insurers to assess climate risks and set accurate rates for homeowners in susceptible areas.
Jeremy Porter from First Street Foundation highlighted the importance of the NOAA database in understanding the economic impact of climate-related disasters in the U.S. This database is also valuable for homeowners facing rate increases and policy cancellations. However, concerns have been raised about the lack of access to critical data by consumers compared to insurers, leading to information imbalances in the industry.
Experts like Alex Martin from Americans for Financial Reform have warned that removing public sources of data could further exacerbate this information gap, making it challenging for individuals to comprehend their risks and the decisions made by financial service providers. Furthermore, actions taken by the Trump administration, such as cutting funding for NOAA and dismantling climate-related data products, have added to the challenges faced by insurers and researchers in assessing climate risk accurately.
