- Property & Casualty
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In my fourth week with Safegard, I was given the task of renewing the flood zone classifications for a certain company’s various addresses. As I entered the addresses into the “floodpro” website database, it made me think about the impact of location on a building’s flood risk. I then was not surprised to see that two locations, one in Florida and the other in Washington were classified as at greater risk for flooding. Because both locations were relatively close to the coast, or in an area that receives high amounts of rainfall, like Washington. It made me think to myself, “with sea levels continuing to rise, flooding will be worse, so how will insurance companies respond to the sea level rise?”
I found an article, “The cost of flood insurance rising as fast as sea levels” by Don Paul of Buffalo News, that pertained to this dilemma. Here are a few excerpts from the article that I found very telling.
On Sea Level Rise & Flooding
“Of the $52 billion in flood claims since 1978, $38 billion (73 percent) has been tied to coastal flooding. Of that total, $35 billion is tied to just six huge storms, including Sandy and Katrina. All of those storms have occurred in the last 15 years.”
“Data estimates 100,000 people have been impacted by coastal flooding who would not otherwise been in danger were it not for the warming-related sea level rise which has already occurred. Nothing can be done about that. But the future rate of sea level rise still has high uncertainty.”
“If you haven’t figured it out yet, the enormous debt and skyrocketing future debt for NFIP impacts everyone depending on the program across the country, including flood plains in our region. NFIP is heavily subsidized, otherwise premiums would be unaffordable for many homeowners who hardly are in the upper income range, and for small businesses.”
An insurance based company, whether it be a carrier or a broker, needs to foresee future risks and tighten up loopholes so that they can be profitable. This principal should be applied to any company, however, because if one does not plan for contingencies, they are bound to fail. I believe that the U.S. as well as the world, needs to foresee the dangers associated with warming-related sea level rise and make changes. The pattern of sea level rise will continue without the U.S. metaphorically sending their risk manager to the jobsite to teach us how to minimize risks. Flood insurance is in for a major headache if this pattern of sea level rise and coastal storms continues.
Read about Jack Quirk in our Summer Internship Program post.