Even the National Geographic (August, 2016) cites an “invisible crisis,” the “vanishing (High Plains or Ogallala) aquifer.” We're pumping it dry to grow crops and there is no way, no matter how many Midwestern rivers flood, to refill it. The water is used to grow grain (and, for drained California's aquifers, other food products); consider that the grain feeds cattle that also consume water; “a single quarter-pound hamburger requires about 460 gallons of water to raise and process the beef.” The next “dust bowl” event will make that of the 1930s look like a picnic in the park.

There is, of course, no insurance policy that covers dried-up aquifers or wells with no water in them; the closest thing to drought insurance is federal crop insurance, and that is pretty expensive stuff. Years ago this columnist suggested a pipeline to pump flood water from the annual floods in the Southeast and Midwest to California or other dry areas.

Water is already more expensive than gasoline, and the money farms would pay for all that excess rainwater would more than pay for the cost of a pipeline and a gathering and filtration system.

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Is there anything the insurance industry could do, besides paying for the losses and raising next year's premiums? (AP Photo)

Ethical underwriting?

We've not heard much about the Keystone Pipeline lately, but if politicians want a pipeline, why not build one that ships water instead of Canadian oil sludge. Considering Ft. McMurray's wildfires of last summer, there won't be much of that for awhile.

The evening news covers every new wildfire in the West on a daily basis. There is always the image of some burned-out mansion that was built on the side of a canyon somewhere in California, and one can envision the homeowners claims: very easy to settle. Just pay the policy limits. Oh, and raise the neighbors' premiums for the following year, for they'll be next.

“Each year, as winter turns to spring and spring turns to summer, the wildlands throughout our nation ignite and threaten the lives of hundreds … while causing indescribable devastation to various regions,” says Tim Sendelbach, editor-in-chief of Firehouse, a publication for the fire service (June, 2016). He asks, “Is this our new normal?”

“Not unlike the structural world, the barriers of politics and human behavior also encumber our nation's wildfire firefighters,” he adds. “Prevention may to some be nothing more than a buzzword, and it may not be met with a great deal of enthusiasm within society, but we cannot bow down and accept the predictable loss of life and property as our new normal.”

Is there anything the insurance industry could do, besides paying for the losses and raising next year's premiums? Some underwriter somewhere approved policies on those big canyon-side homes that will burn, if not this year then next. Is that ethical underwriting?

There's not much that can be done about the heat waves, though. That's climate change. Are we doomed?

Ken Brownlee, CPCU, is a former adjuster and risk manager based in Atlanta, Ga. He now authors and edits claims-adjusting textbooks. Opinions expressed in this article are the author's own.

Related: Insurers, banks and pensions face climate change risk, says Global Risk Institute