Most of us know by now that climate change has all sorts of financial repercussions. Among them is the cost of insurance against damage caused by increasingly damaging wildfires, floods, and other extreme weather. Here are some stories to bring you up to speed on this topic and some of its tangents.
Start here for a story focused on last summer’s catastrophic floods in Germany that lays out the core philosophical dilemma of opposing kinds of unfairness: making individual homeowners pay for a global problem versus making all taxpayers pay for damage to homes built in especially risky places. “How do you insure yourself against climate change?” Kristie Pladson, DW.
Unfairness is especially apparent when it comes to insurance for the world’s poor (both individuals and governments), as explained in this excellent article: “Climate risk: insuring against the inevitable,” Ruby Russell and Gianna-Carina Grün, DW.
For Americans, the key policies for flooding are those of the Federal Emergency Management Agency, FEMA, which recently updated the way risks are calculated. The premiums for these policies are just now changing.
- To see why FEMA’s flood risk data needed updating in the face of climate change, read“FEMA knows a lot about climate-driven flooding. But it’s not pushing homeowners hard enough to buy insurance,” James Bruggers, Inside Climate News.
- For a description of the changes, see “New interactive map shows impacts of federal flood insurance rate changes,” Laura Lightbody, Pew Charitable Trusts.
- For one example of the kind of problem that will still arise, in this case for modest homes in the expensive and vulnerable Florida Keys, see “Flood insurance rates are spiking for many, to account for climate risk,” Greg Allen, NPR.
- Here is a quick glimpse of the political dimension of federal flood insurance: “Historic restructuring of flood insurance begins tomorrow,” Thomas Frank, Climate Wire/E&E News.
Floods, fires, and cyclones: a new report from the Climate Council, of Australia, warns Australians that they are approaching an insurance crisis as risks posed by severe and damaging weather events continue to rise: “Climate change means 1 in 25 homes could become uninsurable by 2030, report warns,” Nick Kilvert, Australian Broadcasting Commission (ABC).
Mortgages are also on the climate-change hit list. Naveena Sadasivam writes at Grist that a new report from the Research Institute for Housing America expects several kinds of trouble in the housing market and perhaps a call for “massive bailouts”: “Even U.S. bankers are getting anxious about climate change.”
According to New York Times climate reporter Christopher Flavelle, “The insurance crisis is making California a test case for the financial dangers of climate change nationwide, as wildfires, floods and other disasters create economic shocks well beyond the physical damage of the disasters themselves. Those changes have already started to affect home prices, the mortgage industry and the bond market.” As this article explains, many elements of the financial system supporting housing are involved, in complicated and intertwined ways. “Wildfires hasten another climate crisis: homeowners who can’t get insurance.”
Nor is it only housing that faces increasing damages and higher insurance costs. Agriculture is in trouble, too. To understand how, read “As extreme weather batters America’s farm country, costing billions, banks ignore the financial risks of climate change,” Georgina Gustin, Inside Climate News, and “As wildfires worsen, more California farms are deemed too risky to insure,” Jake Bittle, Grist.
And then check your own insurance coverage.
This series is curated and written by retired Colorado State University English professor and close climate change watcher SueEllen Campbell of Colorado. To flag works you think warrant attention, send an e-mail to her any time. Let us hear from you.