Droughts and Insurance

In 2015, California and other western states faced severe droughts, with many areas experiencing extreme or even exceptional droughts. It’s now 2022 and the country is in a megadrought, the driest the country has been for the past 22 years, and the worst drought in the past 1200 years. Lakes Powell and Mead, which serve to supply water and power to Arizona, California, Nevada and parts of Mexico, are at twenty-seven percent of capacity, the lowest since the lakes were created. Other southwestern states are also critically dry, as seen on the map provided by U.S. Drought Monitor.  While not as flashy as hurricanes and tornadoes, droughts can affect the insurance industry as well, first with wildfires and then with losses to crops, soil erosion, and other issues.

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