Florida Insurers Recognize Cost Of Climate Change

By Fred Grimm

Environmental writers often employ a banal parable to explain America’s disregard of an existential crisis: Drop a frog into a vat of boiling water and the amphibian leaps to safety. Place the frog in tepid water, gradually increase the heat to 212 degrees, and the creature stays put, oblivious, never grasping the peril.

It’s a lousy example. Toss a frog in scalding water, it dies. Might as well add frog soup to the dinner menu.

Nor does the other option make sense. Not even a frog is idiot enough to hang around once conditions turn painful, no matter how gradual. The comparison is a downright insult to froggie intelligence. It’s the human species, not frogs, who’ve convinced themselves that the cascade of disastrous climate anomalies these last few years do not portend a cataclysm.

Insurers, however, are subjecting American disbelievers to an expensive jolt of reality, raising the cost of homeowner insurance to cover the escalating risks associated with climate change. It matters not a whit that a particular property owner refuses to believe that spewing 38 gigatons of carbon dioxide into the atmosphere each year has disastrous consequences. Believe it. Deny it. Either way, the bill for living in a community vulnerable to the effects of global warming – especially coastal Florida – is coming due.

Nowadays, pretending the climate has not gone haywire requires a tenacious state of oblivion. Never mind that South Florida streets flood on sunny days; that the National Hurricane Center has turned to the Greek alphabet to name this season’s 25-and-counting tropical storms; that this summer’s wildfires burned through four million acres of California’s drought-parched woodlands; that a strange and frightening 100-mph derecho windstorm devastated close to a million acres of Iowa cropland in August; that nine of the ten hottest years on record occurred in the last decade; that 2020, so far, has sweltered in the highest temperatures in recorded history.

A declaration signed last year by 15,364 scientists from 184 countries warned, “Soon it will be too late to shift course away from our failing trajectory, and time is running out.”

Except it’s science that’s on the outs. Our climate-change-denier-in-chief would rather pretend nothing’s amiss. “It’ll start getting cooler. You just watch,” President Trump responded to a question about climate change last month. Pay no attention to the warnings from climate scientists, Trump insisted. “I don’t think science knows, actually.”

But when homeowner insurance bills come due, it won’t matter that we have a luddite president whose disdain for climate science mirrors his disregard for epidemiology (plenty evident this week at his super-spreader political rallies). Trump’s fevered supporters can disparage science like a 15th century rabble, but they can’t escape the costs of climate change.

Reinsurance companies who underwrite retail insurers simply can’t afford to ignore the link between warming temperatures and ever-more-expensive, ever-more-costly catastrophes caused by superstorms, wildfires, inland and coastal flooding. Risks have increased, financial losses multiply, so up goes the price of reinsurance. The Sun Sentinel reported last week that 46 Florida property insurance companies suffered combined losses of about $400 million a year from 2016 to 2019. The companies lost $454 million in just the first six months of 2020 with an expectation of even more brutal numbers when the stormy third quarter results are calculated.

The Sun Sentinel reported that reinsurers had jacked up underwriting rates by 20% to 30% earlier this year and plan another hefty jump in 2021. Consumers face increases of 30% to 40%, with no discounts for property owners who embrace the Trumpian theory that climate change is a hoax.

Ernst Rauch, chief climatologist for Munich Re, the world’s largest reinsurer, told The Guardian newspaper that given the increasing intensity of wildfires, flooding and storms, “The only sustainable option we have is to adjust our risk prices accordingly.”

In February, Swiss Re, the world’s second largest reinsurance firm, reported that global insurance losses “have been rising due to rapid development in areas exposed to severe weather and warmer temperatures.”

Swiss Re warned, “The processes of how a changing climate impacts the frequency and severity of natural catastrophes are not fully understood, but failure to act may lead to irreversible tipping points in climate systems.”

The implications for Florida, especially South Florida, are daunting. If the insurers abandon us, the effect will be devastating as a natural disaster. Climate deniers haven’t noticed, but pot has begun to boil.

Fred Grimm, a longtime resident of Fort Lauderdale, has worked as a journalist in South Florida since 1976. Reach him by email at leogrimm@gmail.com or on Twitter: @grimm_fred

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