Insurance companies are starting to refuse coverage

[leftyladyfrommo]

in high fire danger areas. I expect they will start going the same for coastal areas that have become high risk.

My niece lives in a high fire area in northern Idaho. She was cancelled this year. Another company approved her. But looks like a new trend.

[mopinko]

1. at some point, climate change is gonna break the insurance companies.

there is no way it's sustainable in all this shit.

[Hortensis]

31. That's why insurers've been raising prices and many withdrawing

business altogether from disaster-prone regions for years now. Nothing at all new here.

Apparently this reality has been hidden from those not yet affected by the government-subsidized insurance programs that have been picking up some of the slack at enormous costs. Those of course are paid by taxpayers and are increasing enormously. As you say, unsustainable.

What climate change is going to break is the ability of all but the wealthy, who can write their own checks, to build homes on fire-prone California ridges with gorgeous views and Florida beaches. And zoning and other land-use changes may say no to many of those also; rebuilding is only one of the costs resulting from allowing people to live where society has to rush in to protect them from their own choices.

[fescuerescue]

45. Doesn't work that way

Insurance companies will simply raise rates in concert with the risk.

It's all the ever do. It's the core of the business.

It's why the coast is filled with multimillion dollar homes that are virtually certainly suffer extreme damage sometime in next 100 years.

THAT should be un-insurable but instead it's just a very expensive policy.

[mopinko]

50. it doesnt exactly work that way, either.

they dont have the money in the bank to cover those checks.
they depend on investments in the stock market, etc, to cover some percentage of their possible exposure, based on their past experience.

if their exposure exceeds what the actuaries estimated, and if their investment dont make as much, or lose money, they can, indeed, go bankrupt.
losses appear to be piling up much faster than anyone predicted. and natural disasters have an impact on the over all economy, and their investments.
if the markets get tanked, it will be quite a squeeze.
an idiot american president* doesnt help.

they may be able to keep pace, and see far enough ahead, but i dont think it is a given that their numbers will hold up as the tipping points are reached.

[fescuerescue]

53. You are correct of course

Was trying to keep it lite without being a treatise on insurance. Very little wealth held by large entities (super wealthy people (0.001%)'ers, government or institutions) is actually in cash. Even the mega-corps like Apple which have $231 Billion in cash is actually hold it in "cash equivalents".

Much depends on fast the losses ramp up. If they ramp over a few decades, the actuaries are pretty good at adjusting.

If it's a sudden "Black Swan" type of event, not so much. eg. AIG.

But Climate change isn't a sudden thing, it's a gradual thing that covers many political terms of office (at all levels). So that's why politicians are quick to pass the problem on to their successor.

[Amishman]

55. No, a wave of unexpected payouts can easily bankrupt them

Meant are also playing games to duck reserve requirements. Transamerica (life insurance) I know is a big offender. Their parent company (Aegon) is a big abuser of the captive reinsurance shellgame to duck reserve requirements and restrictions on risky assets. They are far from the only one doing this. I won't take contracts with insurance companies (or touching that industry at all) anymore.

If a widespread catastrophe hits a lot of insurance companies will turn out to be empty shells.

[essme]

2. Well, then....the insurance companies are going to go broke with no customers

West coast: earthquakes, forest fires
Mid west: tornadoes
East coast: flooding, tornadoes

Fine- cancel everyone, and then have no customers at all.

I despise insurance companies on every level at this point.

[USALiberal]

4. They will cover other losses......

I can't blame a company that sees climate change impacting their business, or would you rather they raise rates on all coverage to cover climate change issues?

[pecosbob]

3. Wait until two billion people have to relocate because of rising water...

[former9thward]

6. When is that going to happen?

[pecosbob]

7. I believe about the time Bangladesh and Indonesia and Malaysia go under water.

It's just a very pessimmistic appraisal and nothing more than my opinion. I think it will be decades before any substantive changes are made to our greenhouse gas output and I see rising sea levels inundating many coastal areas in the next twenty to thirty years.

[Newest Reality]

8. I don't think that is being too pessimistic

There are so many feedback loops going on in the environment and they are all connected in various ways, this is a big and complex problem and you may have noticed that the predictions climate scientists make tend to indicate shorter time frames than were first expected.

When this happens, that happens. For instance, the fires in the Amazon may decimate and important CO2 sink, melting ice decreases the amount of sunlight reflected vs. absorbed, melting permafrost releases gasses, rising water levels based both on melts AND thermal expansion of the oceans, etc., etc. We tend to forget about how interrelated all systems are on the planet and that we are that, essentially. None of this occurs in a hermetically sealed vacuum, separate from the rest, though it seems some people have a fantasy that it is real and ignore the actuality.

All we know about something like this is from geological records, (like when the last Ice Ages occurred) so it is a novel situation, all things in total, and we can't refer, scientifically, to the last time we dealt with this and what actually happens.

In a car, pushing your foot on the gas pedal injects more fuel and so, more energy and heat are released in the combustion process. We are doing that by the way of the modern lifestyle and the potential for exponential increases in the effects at some critical point are is there.

[pecosbob]

10. This..everything's inextricably linked

Even with the leaps we've made in recent years we can't even hope to model this complex a system. The global population increase just during our lifetimes is staggering. Even if we hadn't filled the atmosphere with carbon dioxide I think our extractive lifestyle would have pushed us to the edge of a cliff very soon anyway. It may be that the warming is just the first of many calamitous trends heading our way as a species. What if tornadoes suddenly decide to start spawning year round, or the jet stream does something funny and turns the Midwest into a deep freeze? I don't think anyone knows what will hapen. We do know major sea level rise has happened before in human history and that it caused people to relocate...there just weren't a whole lot of us around back then. Now there are a lot of us. Thanks for the post.

[Newest Reality]

12. Great response!

Thanks for your input. I see you have been looking into the matter.

On one hand, it is alarming and unsettling to know more about this. Yet, for some, it feels better to have a better sense of what's going on and has some soothing effect on the cognitive dissonance generated by the actual, developing circumstances and the general understanding and meager response to a perfect storm brewing.

Oh, and yes, it is interesting to note the possibility of a new Ice Age, even though that seems contradictory in terms of the idea of "global warming" which is why climate change is a more accurate term to use. Ice Ages occur roughly every 10,000 years, (from the geological record) and the circumstances for that are all about big changes in the amount of Winter precipitation combined with cold temperatures in certain areas. In other words, the perturbation of the system can instigate that. Having read up on that a bit, it is rather interesting and unexpected.

[pecosbob]

18. We are children playing with guns

It may be that as a species we are unable intellectually to deal with it and so bury our heads, but it's evidently not universal as quite obviously many are screaming at the top of their lungs about it...though with seemingly little effect. So there is hope.

I recall as a teen in the 1970s being literally overwhelmed by the possibility (we considered it likely) of nuclear war with the Soviets. It sort of made career planning seem a bit riduculous. That it didn't materialize is irrelevant. It is quite easy to slip into hopelessness when faced with intractable problems with a seemingly intractable government standing in the way. Maybe we'll find a way out of this that doesn't involve leaving the planet. On my good days, I'm skeptical.

Well, it's a brand new Monday morning here and I'm babysitting a forty-pound slobber factory named Snoopy...at least he makes me go outside a couple of times a day. Have a great one.

[Eliot Rosewater]

51. The person you are responding to seems to deny Climate Change...bummer

[NickB79]

36. End of the century

If not sooner. Given the positive feedback loops, I'd say 2075.

https://www.abc.net.au/news/science/2019-08-23/climate-retreat-planning-science/11435382

[Prosper]

5. Concept is supposed to socialize risk.

Insurance companies in quest for profits trying to privatize customers for profit. As situations get worse the government will have to nationalize all insurance. If insurance isn’t socialized by government it will create an economic disaster as more industries lose business due to uninsurability of customers. Climate change may be the unifying alien invasion Regan envisioned.

[Farmer-Rick]

22. Years ago, when I lived next to a lake in Illinois, the government sold me my flood insurance.

It was $3 a month. Never had to use it. Today the average cost of US government flood insurance in Illinois (NFIP) is $87 a month.

Here is an interesting tidbit from Wiki: "This NFIP is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods. As of August 2017, the program insured about 5 million homes (down from about 5.5 million homes in April 2010), the majority of which are in Texas and Florida. The cost of the insurance program was fully covered by its premiums until the end of 2004, but has had to steadily borrow funds since (primarily due to Hurricane Katrina and Hurricane Sandy), accumulating $25 billion of debt by August 2017."

[marble falls]

9. Maybe we need to better consider the high risk areas we chose to live in.

[world wide wally]

17. There is no risk free place to live

Period.

[Lonestarblue]

21. Sometimes those areas become high risk long after people move there.

When Texas was experiencing severe drought a few years ago, around the time when over 25,000 acres burned in Bastrop County, my homeowner’s insurance nearly doubled in one year because I live near a greenbelt that had become a risk during the drought. It was not a risk when I bought my house. Climate change will add to costs for insurance companies everywhere, like unprecedented floods in the Midwest this year and far more Category 5 hurricanes than we used to have.

[Traildogbob]

24. Where we live.

I live in Mtns of Western Carolina. I taught and trained Wildland fire fighters as part of my faculty position at college for Forest Management. Many become local and state Forest Rangers. Multimillionaire transplants rape our Mtns for summer play houses, million dollar ones, within forests. The Rangers ask that the bury thier natural gas tanks, clear brush, wood piles, and trees near the homes for Wildland Fire protection. Especially the tanks, that could explode and kill fire fighters. They refuse, b/c it could cost them a few thousand additional for million dollar play homes. Don't care if lives are at risk. Their response to Rangers," Insursnce will cover losses for homes......and Rangers. So we pay for those lost play homes in our premiums, Rangers say they will keep records and will not protect those homes in a fire blow up. Their lives matter.

[SMC22307]

29. Those are the people I have a problem with --

the selfish million (or multi-million) dollar play home crowd. They've done the same thing along the coast with some of the monstrosities they've built. I truly hope I live long enough to see the effects of climate change on the Outer Banks and big cities like Miami.

[Traildogbob]

37. They fly trump flags from decks here

Guess where 97 percent of them come from to make Mtn play homes? Florida. Arrogant, drive $80,000 dollar jeeps or Humvees, they put on and expensive cowboy hat and think they blend in with Mtn folk. The $20,000 worth of gold bling kinda gives the away. Climate change will help, but then they will be the migrant refugees, escaping death. Build that damn wall, north of Florida and Texas. They aren't sending their best, rapist (Matn tops), bringing masses of drugs (viafgra and assorted old ppl pharm) and diseases. They may just shoot themselves and other Texans and Floridiots if we just wait. If there was a North of Texas border wall, they would all shoot themselves out of our existence within five years. No health care, poison everything, heart disease, chemical disasters and water 10 deep. Build the damn wall before they start fleeing and infesting our neighborhoods. Background check to see who we will allow in. Abbott stays behind, Rubio, Scott, any reBiblical Evilgelicals. MAGA, without Texas, Florida, Bama, Georgia and South Carolina. Definately keep Lesli Graham and his hissy fits out.

[NickB79]

38. Upper Midwest

Anything around the Great Lakes will become a refugee camp, I'm afraid.

[KY_EnviroGuy]

11. Hurricane DDorain may shift the insurance landscape as well....

Hurricane Dorian: as many as 13,000 houses severely damaged or destroyed in Bahamas – live updates

Link: https://www.theguardian.com/world/live/2019/sep/02/hurricane-dorian-category-5-storm-bahamas-florida-south-north-carolina-updates

(snips)

Hurricane Dorian could cause insurance industry losses of up to $25bn (£20.7bn) according to analysts at UBS, Reuters reports. UBS analysts updated their model to reflect a wider potential industry insured loss range of $5bn to $40bn and raised their base case to $25bn from $15bn, with solvency capital at risk.

The analysts estimate about $70bn of natural catastrophe losses for 2019 and added this could erode excess capital and raise prices. Insurers faced record bills from hurricanes, earthquakes and wildfires of over $135 billion in 2017 and got some relief in 2018.
++++++++++
Mohammad Heidarzadeh, assistant professor of civil engineering and head of coastal engineering and resilience at London’s Brunel University, puts this hurricane in context:

“Dorian is a very special Hurricane in many ways. This is the fourth year running that we have Category 5 hurricanes in the Atlantic Ocean. With maximum wind speed of 300 kmh, Dorian is one of the strongest hurricanes ever formed outside of the Caribbean Sea and the Gulf of Mexico. Dorian is also one of the very rare (possibly the only) Category 5 hurricanes to hit Bahamas.

“It is not certain where exactly Dorian will head in the next days because hurricane routes are affected as they interact with land-forms, mountains and high-rise buildings. But based on past data, it is likely to hit the coasts of Florida in about 20-24 hours. The storm surge height is predicted to be 8-10 meters which implies severe flooding in coastal areas. “It is very important to evacuate coastal areas and stay at least 5 km inland during the Dorian’s action.”

KY........

[Takket]

14. The question is, who will help them at all?

The USA has abdicated its position as world leader and under drumpf we saw what Puerto Rico went through. Only begrudgingly getting an aid package and then having to listen to drumpf lie and say they got nearly 5 times what they did.

And that was for a US territory! Who will help the Bahamas?

[KY_EnviroGuy]

19. Perhaps the UK?

From the same link:

The UK has deployed three humanitarian experts to the Bahamas to begin immediate work on assessing the damage. They left London this morning and are expected to arrive in the region later today.

The international development secretary, Alok Sharma, said: “I have sent an initial team of experts to the Bahamas to help assess the damage and coordinate the UK’s response, including any potential use of military assets if required.

The British Royal Navy auxiliary ship RFA Mounts Bay has been pre-positioned to the region to offer her support if required.

Since The Bahamas is still an independent UK Commonwealth realm, it may be safe to assume most properties are insured out of the UK.

Please note that I posted the info about The Bahamas only to point out the potential danger of this storm and not to imply US insurers would be responsible.

I fear we're about to see massive storm damage up the southern East coast, perhaps with unprecedented flooding from rain and storm surge coupled with high tides.

KY....... ...........

[NickB79]

39. If Brexit goes through in 2 months, the UK's economy will be ruined

Don't expect a lot of financial aid from them, I'm aftaid

[SWBTATTReg]

13. I am surprised that the ins. companies haven't been doing this, although in some states, they (...

the state regulators) may prevent this cherry picking of customers. Oftentimes, prices of policies also go up through the roof. Maybe this might have the effect of preventing building in sensitive areas?

[mountain grammy]

15. I live in the mountains.. pay $100/month for homeowner's insurance....

rising steadily for 20 years.. Started at $300/year.

[leftyladyfrommo]

42. That's about what I pay in KCMO for a 750 sq ft house.

It's expensive. $1500 deductible.

[Fla Dem]

16. Flood Insurance covers coastal properties.

Insurance companies already don't pay for damage caused by flooding.

[world wide wally]

20. Flood ins runs about 300-500 $ per month on the east coast

[Farmer-Rick]

23. In 2019 government funded flood insurance (NFIP) in Florida was

$46 a month or $550 a year AND get this...it is about 21% cheaper than the US average at $699 per year. Is it because Traitor Trump has his weird golf resort there?

https://www.valuepenguin.com/average-cost-flood-insurance

[not fooled]

35. And/or pukes desantis and red don

catering to red-state voters.

"Socialism for me but not for thee."

"Climate change? We got you covered while we continue the raping and pillaging unabated."

[Fla Dem]

26. I've lived on a Fla barrier island for 20 years. The highest annual premium I paid was $747.

That was reduced this year to a $482 annual premium.

[world wide wally]

33. We have a house on the beach in Cape Cod and flood ins costs us $6000/year

[Farmer-Rick]

48. Holy crap that's high.

Why's it so high for you? Do you go through the NFIP? The average cost in Massachusetts is $1,251 a year according to: https://www.valuepenguin.com/average-cost-flood-insurance

[bucolic_frolic]

25. Tell them you rake leaves

and they will approve your fire insurance. Tell them Trump said so.

[True Blue American]

28. That will work!

Yeah, right!

[True Blue American]

27. I was listeing

To an expert this morning on Federal Insurance. With all the storms and fires the Government help is reaching the breaking point.

[bucolic_frolic]

30. Assess your risk

Climate change will increase the cost of maintenance on real estate. Roofs, siding will wear out faster, not to mention the possibilities of fire, flood increasing, ice storms, tornados too.

Small simple houses, or renting, are increasingly practical. For the most part there's no price pop in McMansion real estate over 20 years old anyway. People get locked into older homes because they stop appreciating. It's hard to navigate the bigger picture, but it's always there and in some ways is the biggest component of net worth.

Small wonder some people decide to RENT.

[Marthe48]

32. In Oh. ins. co. don't have to insure you if you have certain dogs

such as pit bulls.

I hate ins. companies. Mine added a separate deduction for wind damage.

As for taking risks, I think The Weather Channel team has more guts than any ins. company.

[Cicada]

34. Maybe people should abandon hi danger areas

[NickB79]

40. This is the shit that will collapse civilization by the end of the century

Death by a thousand cuts, until government's are bled dry and people are left to fend for themselves. A never-ending Puerto Rico on a global scale.

My daughter is going to see some Mad Max shit in her lifetime.

[Danascot]

41. Dave Barry on Hurricane insurance

HOMEOWNERS' INSURANCE: If you own a home, you must have hurricane insurance. Fortunately, this insurance is cheap and easy to get, as long as your home meets two basic requirements: (1) It is reasonably well-built, and (2) It is located in Nebraska.

Unfortunately, if your home is located in South Florida, or any other area that might actually be hit by a hurricane, most insurance companies would prefer not to sell you hurricane insurance, because then they might be required to pay YOU money, and that is certainly not why they got into the insurance business in the first place.

[elocs]

43. I can't blame insurance companies from refusing to cover places that get destroyed over & over again

I'm not sure why anyone who had a choice would want to stay in a place where they are at regular risk of having their homes and even their lives destroyed by natural forces.

In my Wisconsin city on the Mississippi and on my side of town there are people who must pay flood insurance because they are listed as being on the flood plain where there are never been flooding but water in the basements from rising groundwater.

We need to consider the degrees of separation between any of us and those who suffer in these natural disaster. I'm good at remembering birthdays and last February I was trying to confirm if a day was the birthday of a then girl I dated in college 45 years ago here in Wisconsin and I hadn't seen her in nearly that long. I did find her and it turns out she lives in California and I didn't think I knew anyone in California.
She lived in Paradise and I wondered why that name was familiar and then I remembered: the place destroyed by the wild fires.

[leftyladyfrommo]

44. I asked some people from California why they

stay there when there us just one disaster after another.

They love Califirnia for all the perfect days. Willing to overlook the fires and floods and mudslides.

[elocs]

46. But I would think differently about those fires, floods, and mudslides

were I an insurance company who had to continually pay for replacement of houses and belongings that keep getting destroyed by them.

[Xolodno]

47. Not surprised....and expect a lot more of it.

...whole lot more.

In northern California where all the fires occurred, most of the insurance companies placed the renewals on the state high risk plan. Which is an awful policy, basically just insuring yourself against a catastrophe and is very expensive. Some of the larger companies are offering a "Difference In Conditions" policy (covers only the deductible portion of the state policy), but at least you get full coverage.

What needs to happen is a regional insurance fund. For example, a hurricane coverage that takes into account of losses, frequency etc. from Texas up to New York and beyond. Likewise, wildfire coverage that includes all the states west of the Rockies.

But good luck with that, everytime it gets proposed some enterprising politician rallies the voters against it along the lines "why should New York pay for Florida Hurricanes". And the situation just continues to propagate itself.

[ReformedGOPer]

49. But, but, climate change is all a hoax, right?

[dlk]

52. Insurance Companies Are Businesses That Exist to Make Profits

That is their ultimate concern/goal.

[Prosper]

54. Some minor building code changes

could make huge differences in damage cost. I had my roof coated with a heat reflective coating before Hurricane Ivan. My roof was the only one in my neighborhood that didn’t need replaced after Ivan. Local paper did a story about it but that was the end of it. I wrote my homeowners insurance about my roof but never heard back.

[Nitram]

56. The only way to persuade people to stop building in areas prone to landslides, flooding, and

wildfires is for insurance to be denied. Unfortunately the federal government provides insurance for flood-prone areas. In many cases, it is the wealthy who benefit from insurance on properties on beaches and shorelines.