The environmental investor advocacy group Ceres is releasing a report today that says the insured portion of annual losses from natural catastrophes has declined in the last 30 years, even as those losses have increased.
The New York Times reports that from Florida to Delaware, insurance for coastal property is getting harder to find as the industry backs away from coverage in those areas.
“I’m worried because insurers only stay in markets until they deem them not profitable,” Washington state insurance commissioner Mike Kreidler told the Times. “We want these insurers to stay fully in the market.”
After Hurricane Sandy, many Long Island homeowners, even those whose properties were less damaged by the storm, lost their insurance. After Hurricane Katrina, coastal Virginia residents had the same experience, the Times said.
Last year, less than a third of $116 billion in worldwide losses from weather-related disasters were covered by insurance, according to data from reinsurer Swiss Re. In 2005, the year Katrina struck, insurance picked up 45 percent of the bill.
The gradual, low-key withdrawal reveals an alarming weakness. Even as the risks of climactic upheaval increase with a warming atmosphere, the industry created to provide for civilization’s first line of defense against disasters is turning tail.
“In the long run,” the Ceres report added, “these coverage retreats transfer growing risks to public institutions and local populations and reduce the resiliency of communities, which are less able to finance post-disaster recoveries.”