The term “bluelining” has been used in environmental justice and climate finance discourse since at least the early 2020s. Initially describing disinvestment in areas prone to sea level rise and flooding, it has since expanded to include wildfire, hurricane, and heat risks. Since minority and low-income communities are more likely to live in places highly exposed to climate hazards, bluelining can perpetuate systemic oppression and inequality. In this way, bluelining mirrors and exacerbates some of the impacts of redlining – a housing policy in the United States in the 1930s in which banks and insurers denied mortgages and services to neighborhoods with high minority populations, marked with red lines on maps. Neighborhoods were given “grades” like A, B, C, D to rate their riskiness based on the population. While racial demographics fueled redlining, environmental vulnerability to climate-related disasters is the key factor in bluelining.

• In 2025, over 28,000 acres burned in wildfires that roared through Los Angeles County, CA, leaving many homeowners without coverage as major insurers withdrew from the region. The housing market became extremely competitive as people scrambled to find a place to stay.

• In Florida, rising flood and hurricane risks have spurred insurers to cancel thousands of policies in coastal areas. High flood risk areas – many with majority Black and Latinx populations – experienced rising insurance premiums or complete coverage loss.

• Home insurance premiums have already increased by over 50% in some high-risk areas. Over one-third of insured losses from extreme weather events this century can be attributed to climate change—a $30 billion annual average. These losses continue growing each year.

• Financial stress: Climate disasters can leave residents with housing insecurity, loss of generational wealth, and reduced ability to recover from future events. For many low-income families, their home represents their only major asset. Losing a home can wipe out generations of wealth-building.

• Limited social mobility: Without insurance, prospective homeowners cannot qualify for mortgages, creating major barriers to homeownership and upward mobility.

• Lack of stability: Without the ability to insure or rebuild homes, communities face stagnation, aging populations, and declining investment. As communities are forced to migrate elsewhere, demand for housing increases in safer areas, driving up real estate costs and pricing out younger families with limited wealth.

• Harms to community resilience: Deeming certain neighborhoods as undeserving of insurance or investment is both disrespectful and alienating, leaving community members feeling disposable and unimportant, isolated, and facing lasting generational consequences.

• Individual stressors: Climate-fueled extreme weather events are a major cause of eco-anxiety, especially for people with housing insecurity and systemic neglect. Chronic exposure to environmental risk and disaster without support services leads to increased psychosocial stress and worsened health outcomes over time.

• Legacy of Redlining: Neighborhoods that were subject to redlining are more vulnerable to bluelining, continuing cycles of social immobility. The 1930s redlining policies in the United States left many communities impoverished, with fewer trees and green spaces, higher exposure to air pollution, hotter temperatures from the urban heat effect, lacking central air conditioning, decayed and substandard housing, and increased vulnerability to flooding due to outdated infrastructure. A Redfin study revealed that formerly redlined neighborhoods face 25% more flood risk than non-redlined areas.  

• Communities of color: Insurance claims are less likely to be paid in predominantly Black neighborhoods, highlighting the need for stronger policies and legal enforcement to ensure fair treatment. A 2018 study by Rice University and the University of Pittsburgh found that following natural disasters, Black survivors’ wealth decreased by an average of $27,000, while White survivors in the same counties saw average wealth increases of $126,000, primarily due to disproportionate disaster relief and aid from organizations like FEMA.

• Low-income populations: While bluelining also impacts wealthy communities, these residents often have sources of wealth beyond their house, giving them the choice to relocate, rebuild, or retrofit their homes. Lower-income homeowners tend to have all or most of their wealth invested in their property, and are thus more impacted by climate disasters. Additionally, donation platforms can unintentionally better serve wealthier demographics: one study found that higher-income individuals received more donations and larger amounts than lower-income individuals following Colorado’s Marshall fire in 2021.

• The English National Study of Flooding and Health (2019) found that individuals whose homes were flooded without insurance had significantly higher odds of experiencing post-traumatic stress disorder (PTSD) compared to those who were insured. Additionally, people reporting severe stress due to insurance-related issues, such as denied or delayed claims, had dramatically increased odds of developing depression, anxiety, and PTSD.  

• A 2022 California Department of Insurance analysis showed that insurers increasingly canceled or refused to renew policies in wildfire-prone areas, especially those overlapping with previously redlined neighborhoods. According to news reports,
  California insurance companies have used satellite and AI-driven climate risk models to deny coverage based on fire risk. The recent 2025 Southern California wildfires demonstrate the mass destruction possible, leaving uninsured homeowners with virtually nothing and no straightforward path to financial and emotional recovery.

• Major insurers such as State Farm and Allstate stopped issuing new home insurance policies in California 2023, citing climate instability and high rebuilding costs in vulnerable areas. While California’s government-backed insurance plans have stepped in to fill some gaps, these programs offer only limited coverage, leaving low-income and marginalized communities with inadequate support and few options to relocate or retrofit their homes.  

• Lack of transparency makes the bluelining decision process difficult to follow and identify. Climate risk scoring tools provide risk profiles of properties and neighborhoods, but their scoring methodologies are often undisclosed. This lack of transparency limits community awareness and the ability to understand and dispute decisions by insurers and banks, and makes advocacy and legal recourse challenging.

• Research by Dr. Robert Bullard, often called the father of environmental justice, documents how historically redlined communities now experience compounded harms due to climate risk-driven disinvestment. The National Community Reinvestment Coalition found that redlined neighborhoods are more likely to be urban heat islands and flood-prone while simultaneously more likely to be denied insurance and loans. 

1. Foster understanding: Build better understanding of climate risk and bluelining among policymakers and leaders through targeted conversations and education.
2. Promote self-determination: Ensure community members are crucial figures in advocacy and decision-making processes affecting their neighborhoods.
3. Integrate climate models: Use regulated and easily-accessible climate models to factor climate risk and bluelining trends into equitable housing policies. These models should be public and transparent.
4. Hold institutions accountable: Mandate equitable insurance policies and monitor them to prevent discrimination in claims processing, with legal recourse available for unfair treatment.
5. Foster collaboration: Financial institutions should actively support and engage with communities to develop mutually beneficial solutions.
6. Incentivize investment in communities: Policies such as the Community Investment Act and the Greenhouse Gas Reduction Fund should incentivize banks to invest in vulnerable communities. Additionally, insurers must stop underwriting and investing in new fossil fuel projects, and instead rapidly align their business with credible 1.5°C transition pathways.
7. Avoid greenwashing: Prevent greenwashing tactics that could obscure risk and lead to maladaptation.  
8. Support resilient infrastructure: Provide subsidies and lower interest loans not just to individuals, but also to community organizations for climate-resilient retrofits (green roofs, tree planting, porous roads, parks, etc).
9. Expand housing options: Increase the supply and long-term affordability of housing in climate-safe areas while supporting equitable planned relocation for residents in severe danger zones. Protect renters from displacement by enforcing rent control.
10. Preserve community identity: Maintain the cultural vibrancy and history of neighborhoods to empower community cohesion and promote belonging in the face of change. 
    

• Success Story: The Generali Group: Increased awareness of social issues, combined with public pressure, has successfully influenced policies and spurred positive action from insurance companies. The Generali Group, Italy’s largest insurance company, announced in 2024 that they would no longer provide insurance for projects involving oil and gas expansion due to environmental harm and negative impacts on surrounding communities, such as air and water pollution. As part of the Forum for Insurance Transition to Net Zero, Generali has inspired other major insurers to follow suit and take a stand against fossil fuel expansion.

• More attention is needed on the downstream impacts of bluelining, including how insurance withdrawal can destabilize housing markets and limit access to mortgages in high-risk areas, as well as how this financial strain could reduce property values, slow development, and erode household wealth.

Bluelining opens a landscape of complex questions extending beyond financial services into climate and intergenerational justice, mental health, community resilience.

1. How do climate risk assessments by financial institutions simultaneously represent both rational business decisions and potentially discriminatory practices?  
2. How does bluelining contribute to the cycle of intergenerational poverty and wealth inequality?  
3. What are the broader implications of bluelining for community resilience, social cohesion, and demographic changes in affected areas?  
4. What role should the government play versus private industry in bearing the financial burden of increasing climate disasters?  
5. How are impacted communities empowered to participate in decisions about land use?  
6. What perspectives or solutions might be missing from this discussion of bluelining? Whose voices should be centered in developing responses?

California Adopts Wildfire Models for Insurers, EU Climate Resilience Initiative, Google’s ‘Virtual Satellite’, and More, published in Climate Proof on August 4, 2025 by Louie Woodall.

Ettinger, J., Fine, J., Yue, Y., Kotcher, J., Marlon, J., Carman, J., Rosenthal, S., Myers, T., Ortiz, L., Verner, M., Leiserowitz, A., & Maibach, E. (2025). About half of Americans understand that global warming is increasing homeowners insurance costs. Yale University and George Mason University. New Haven, CT: Yale Program on Climate Change Communication. https://climatecommunication.yale.edu/publications/americans-understand-that-global-warming-is-increasing-homeowners-insurance/ 

Ezell J. M. (2025). Property insurance bluelining as a social determinant of health. The Lancet. Planetary health, 9(6), e449–e450. https://doi.org/10.1016/S2542-5196(25)00113-5

Hemmati, M., Gray, I.P. & Bowen, S.G. (2025).The growing void in the U.S. homeowners insurance market: who should bear the rising cost of climate change?. npj Clim. Action 4, 35. https://doi.org/10.1038/s44168-025-00231-8 

Kousky, C., Treuer, G., & Mach, K. J. (2024). Insurance and climate risks: Policy lessons from three bounding scenarios. Proceedings of the National Academy of Sciences of the United States of America, 121(48), e2317875121. https://doi.org/10.1073/pnas.2317875121

Mulchandani, R., Smith, M., Armstrong, B., English National Study of Flooding and Health Study Group, Beck, C. R., & Oliver, I. (2019). Effect of Insurance-Related Factors on the Association between Flooding and Mental Health Outcomes. International journal of environmental research and public health, 16(7), 1174. https://doi.org/10.3390/ijerph16071174

Stain, H. J., Kelly, B., Carr, V. J., Lewin, T. J., Fitzgerald, M., & Fragar, L. (2011). The psychological impact of chronic environmental adversity: Responding to prolonged drought. Social science & medicine (1982), 73(11), 1593–1599. https://doi.org/10.1016/j.socscimed.2011.09.016

Ziou, M., Gan, D. Z. Q., Boon, B., Teo, S. M., Menssink, J. M., Yu, W., Smith, C. L., Patrick, R., Gunasiri, H., Fava, N. J., Baker, D. G., Browne, V., Simmons, M. B., Zbukvic, I., Bower, M., Stapinski, L., Killackey, E., McGorry, P., Brennan, N., Filia, K. M., … Gao, C. X. (2025). Vulnerability and psychosocial impacts of extreme weather events among young people in Australia. Environmental research, 275, 121385. https://doi.org/10.1016/j.envres.2025.121385

Home Insurance Affordability Update, published by the Actuaries Institute, Sydney, by Paddam, S., Liu, C., Philip, S. in 2023.  

Within Our Power: Cut Emissions Today To Insure Tomorrow, published by Insure Our Future in December, 2024, written by Risalat Khan. 

Scorching Premiums: Climate Costs Hit Insurance Markets, by Climate One, published on August 1, 2025.

Published: November 4, 2025

Author: Fiona Clayton
LinkedIn: www.linkedin.com/in/fiona-clayton-149797263

Editor: Colleen Rollins, PhD