One way the insurance industry copes with rising risk from Climate Destabilization is to abandon high risk areas. Then state governments create taxpayer funded alternative insurance for those multimillion dollar properties in harms way, which transfers the cost to the middle and lower class taxpayers. Florida is the poster boy for this "socialism for the rich".
The Farmers' suit tells the world that regardless of what politicians and pundits say about climate change, an insurer is going to try to avoid paying for losses that could have been foreseen and prevented.
Moreover, a number of major insurers feel that the potential losses of climate change can be addressed through existing procedures for analyzing and pricing risk. For example, one thing they can do is simply leave the market in places that are highly vulnerable to foreseeable negative effects.
This was the case in Florida as insurers voted with their feet after the $26 billion in insured losses incurred by Hurricane Andrew in 1992, and after Florida regulators wouldn't let them raise prices to adjust for the increased risks created by a rapidly growing population in harm's way. In 2002, the state was forced to set up its own insurance pool to protect against losses from windstorms.
The Citizens Property Insurance Co., which charges below-market rates thanks to the voter-conscious state legislature that set it up, quickly became the biggest property and casualty insurer in the state. Noting its precarious financing, a report on the state insurance market prepared by Florida State University in 2013 asserted that "Florida could be one major storm away from the state having to take all wind risk."
Should such an event occur, Florida would cover these losses by issuing bonds, which would be paid off by a surcharge on all insurance policies. That means any insured Floridian, even those with just an auto insurance policy, would take a hit.
Thus, Florida is shifting the burden of future catastrophic losses arising from wind damage from the affluent who have built along to coast to all Floridians. [emphasis mine]
The taxpayer funded National Flood Insurance throws your money away, over and over, to repair houses foolishly built in harm's way. These examples are just from two states.
One house in the northern New Jersey town of River Vale has been flooded at least 15 times in the last 36 years. And each time, the taxpayer-supported National Flood Insurance Program has paid to repair the damage for a cumulative total of $1.35 million, according to data from the Federal Emergency Management Agency.
Another house in Pompton Lakes, N.J., about 20 miles west of Manhattan, has flooded even more often: 20 times. It has received $650,000 in flood insurance payments.
Some 4,700 homes and businesses in New York and New Jersey are classified as “severe and repetitive loss" properties by the government, meaning they flooded at least twice over a 10-year period and suffered extensive damages. All told, according to a WNYC analysis of the data , the flood insurance program has paid out more than a billion dollars to fix them, for an average cost of about $213,000 per property. [emphasis mine]
This is INSANE!
I can't think of a better word than INSANE! It is so easy to predict where flooding will occur. A 10 year flood or 20 year flood is very easy to locate, and now we are having to look at 100 year flood plains.
Ancient Cataclysmic Floods were the Ice Age Floods that left erosional and depositional features that preceded the Missoula Floods 15-18,000 years ago. Spokane's geology was created by these floods; that was at the end of the last Ice Age. Spokane is still plagued by flooding but of a very different scale.
It makes no sense to build on known flood plains. To state the obvious, "There should be laws preventing such construction and no more insurance on known flood plains." People who take the risk of being flooded should be the insurer of their property.