Not What You Think - A Lighthouse in Michiganduring a storm in 1998
You can argue with the right wing neo-con cranks. You can argue with the fossil fuel industry. You can argue with Dick Cheney or Stephen Harper.
You can't argue with the insurance industry. A lot of Americans are coming to grips about that reality and the immediate impact of global warming.
A Washington Post feature article today reveals the plight of many Americans who've built their dream homes along the US eastern seaboard.
"A place near the water has been an American dream for a very long time. Fifty-four percent of Americans live within 50 miles of a coast.
"This is the year, however, in which the big boys in global finance got religion about climate change. As a result, this American dream -- as far north as the Washington area, and even New York and New England -- is under attack.
"Follow the money. Insurance doesn't sound like a world-changer. It seems so banal and prosaic, like reliable electricity or clean water.
"Yet without it -- you want a place to live? You cannot get a mortgage without insurance.
You want a job? A commercial enterprise cannot run without insurance.
"When Peg and Ronald Buchanan left Silver Spring two years ago for retirement, they saw as their nest egg the house they'd built right on the ocean in the North Carolina Outer Banks.
It's a big place -- eight bedrooms, nine baths, three stories, 5,000 square feet, heated pool, kiddie pool, wild horses out back, dolphins out front. 'It sits like a palace in the sky,' Peg says. The front door is 12 feet above sea level. They figured on selling it for $2 million. The proceeds would pay for the rest of their lives.
"Now they're wondering if they will ever be able to sell it. The map of their part of Carova Beach has been redrawn as a high-risk flood area by the Federal Emergency Management Agency. As a result, it may not be possible for any new buyer to get a mortgage.
"The thought of losing their retirement reserve 'really makes me mad,' Peg says. 'I feel like going over with a shotgun.'
"Emotion, however, does not drive insurance writers. By definition, they are the world's most serious futurists. When it comes to life insurance, for example, they pride themselves on their ability to routinely and accurately predict when a whole lot of people are going to die. If their models are wrong, and they have to pay out too much money too quickly, they go bankrupt.
As a result, these fiduciaries have a long and distinguished history of driving social change. Passion-laden causes move beyond the realm of hand-waving activists when large gray men in large gray suits decide they must.
"Highway fatalities dropped when insurance companies started financially punishing unsafe drivers, as well as makers of unsafe cars. Cigarette smokers saw their life insurance premiums skyrocket.
"The big buzz in the insurance industry today is climate change.
"'Our view is that there are some events that have the potential to be so large as to exceed the capabilities of the insurance industry, as well as the funding and financing capability of individual states,' says Michael Trevino, the spokesman for Allstate, one of the nation's largest home insurance companies. 'Those are events that have the potential to be $100 billion. These events are so enormous, no entity has the ability to manage it.'
"Some require little imagination, such as a Category 4 hitting Miami or a Category 4 coming up the Houston Ship Channel aimed at the center of the U.S. oil industry, and America's fourth-largest city.
"But the one Allstate is focused on is a Category 3 funneling straight north up New York Harbor. Pushing a wall of water perhaps 15 feet tall up Broadway toward the second-story windows of Wall Street.
"This is why Allstate has decided not to write new homeowners insurance in the five boroughs of New York City -- Manhattan, Brooklyn, the Bronx, Queens and Staten Island -- plus Westchester County, just north of the city, and the counties that make up Long Island -- Nassau and Suffolk. In the most vulnerable parts of that market, they are also not renewing existing insurance."
As the effects of global warming spread, so will the impact of directly affected sectors such as the insurance industry. Don't be surprised when we see these influences even here in Canada.
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