Property Insurance In Danger From Climate Change Says Industry
by Susan Kraemer in Climate Change/Global Warming, Real Estate
Property insurance may no longer be available in the future if we can’t get control of climate change, says Nick Starling, the Director of General Insurance and Health for the Association of British Insurers. Climate change could end the continuing availability of property insurance.
Humanity is now moving completely outside of risk levels associated with human history
The insurance industry might be overwhelmed by losses and no longer be able to pay out for property losses with increased climate change, the Association of British Insurers announced this week.
Having examined scientific research commissioned by the British Meteorological Office, the ABI found that even the minimum of 3.6 degrees Fahrenheit rise in global average temperatures (2 C) would increase annual British property losses to $77 million from inland flooding and windstorms.
A global average temperature rise of 10.8 F (6 C) was also played out in scenarios, along with average global rise of 7.2 F (4 C) as well. At those levels the Director of General Insurance and Health for the Association of British Insurers said property insurance would simply no longer be possible for the insurance industry, which depends on actuarial history to determine risk.
Humanity is now moving completely outside of risk levels associated with human history.
Even covering potential higher risks associated with a 2 C rise would create an increase in capital requirements for the industry. Professor Julia Slingo, Chief Scientist at the Met Office warned that a temperature rise to 4C would make some parts of the world uninhabitable.
“We have committed to a different world than the one we are used to,” she told the ABI’s Climate Change conference.
A different world is one with, among other things, no property insurance to protect homeowners in the future. Our grandchildren will be very much on their own in the sad future we are making for them.
Source: Carbon Based
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Posted on Nov 17, 2009
About the Author
Susan Kraemer
Susan Kraemer is a transplanted Kiwi retired from three design businesses she started from humble beginnings in N.Y.C. and California, who now lives in the Bay Area. She enjoys living and writing in a gorgeous house her husband designed and built years ago overlooking the San Francisco Bay in the East Bay Hills. She is thrilled to have just eliminated her electric bill through SunRun which makes it free to go solar, and she thinks you should look into getting $0 down solar too (in CA, AZ, CO, MA, PA, and NJ) She works to publicize the many great solutions to climate change we can find if we just put our minds to it.2 Responses to “Property Insurance In Danger From Climate Change Says Industry”
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Liz Taylor
Nov 23, 2009
This comment came from Nick Starling just days before unprecedented rainfall hit the North of England resulting in flooding on a scale unknown before, twelve inches in one day. Presently 1300 homes in one small area of Cumbria have been seriously flood damaged, the businesses on Main street in Cockermouth were under eight feet of water, and the rain is returning in full force tonight. So many people are in temporary accomodation and must be wondering right now if they will ever be able to insure their homes again after this.
Susan Kraemer
Nov 28, 2009
Yes, the losses from this “1,000 year” flood are going to be truly huge.