A firefighter watches as the Gifford Fire burns on August 6, 2025, in Los Padres National Forest, California. Lawmakers in California and two other states have proposed bills that would allow insurers or attorneys general to take action against oil companies to offset rising insurance costs. (Photo: Eric Thayer/Getty Images)
Desperate to deal with rising property insurance costs resulting from natural disasters, some state lawmakers are opening a modern line of attack in an attempt to force oil companies to bear the costs of climate change impacts.
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 rising insurance costs.
While none of these measures took effect this session, they signal a growing urgency for action in states where wildfires, floods and other natural disasters have raised the cost of insurance premiums and prompted some insurers to stop writing modern policies.
The proposals follow other state efforts to demand payment from fossil fuel producers for mounting damages caused by climate change. States and localities have filed more than three dozen lawsuits over the industry’s role in the climate crisis, alleging that the companies violated various laws, including consumer protection, public nuisance, failure to warn, fraud and racketeering.
Meanwhile, several states have passed or introduced “climate superfund” laws that employ attribution science – a modern field of research – to calculate the costs of disasters and hold fossil fuel companies accountable for their role in causing them.
These efforts have sparked fierce opposition and legal challenges from oil companies and conservative groups.
Now some Democrats are using a similar premise to try to drag substantial oil companies into the rapidly growing insurance crisis.
In many states, property insurance costs have skyrocketed as insurance companies have paid out larger claims for fires, hurricanes, and floods. Some insurers have stopped writing policies in certain areas.
California and some other places have seen a surge in modern policies from state-backed “last resort” insurance plans after residents failed to find coverage on the private market. California’s program, known as Plan FAIR, suffered multibillion-dollar losses and demanded massive interest rate increases after the 2025 Los Angeles wildfires.
AND Bill in California would authorize the state’s attorney general to sue fossil fuel companies to recover insurance costs. Last month, this solution was not accepted by the committee among both Republicans and some Democrats expressing concerns on fuel prices, among others.
AND Bill in Hawaii would allow insurance companies to seek compensation from fossil fuel companies for their role in causing disasters made worse by climate change. Any income generated from action against polluters will be included in your insurance rates.
The bill passed both the House and Senate but was not passed because the conference committee ran out of time before a deadline earlier this month, i.e. The Honolulu Star-Advertiser reported.
“[T]the largest oil and gas corporations that knowingly contributed to the drought that worsened the fires on Maui are paying nothing, while raking in billions of dollars in profits every year,” the Democrat state senator said. Jarrett Keohokalole wrote in A Honolulu Civil Beat op-ed. “Hawaiian taxpayers should not be forced to foot the bill for Big Oil’s fraud.”
Meanwhile, similar Bill in New York, allowing both insurance companies and the state’s attorney general to take action against oil companies over insurance costs, has been introduced but has not yet received a committee hearing.
As with all regulations affecting the fossil fuel industry, the insurance bills have been met with fierce opposition and powerful lobbying campaigns. If these proposals are accepted, they will undoubtedly face legal action. Fossil fuel companies have long argued that they extract and sell their products while complying with a series of federal regulations that insulate them from state claims for damages.
The states responded that the companies knew about the dangers of climate change but lied to the public, noting a successful campaign to hold tobacco companies accountable for fraud even though their products were sold legally.
Stateline reporter Alex Brown can be reached at: abrown@stateline.org.
This story was originally produced by state linewhich is part of States Newsroom, a nonprofit news network that includes the Ohio Capital Journal and is supported by grants and a coalition of donors as a 501c(3) public charity.
