Mainstream media turns spotlight on property resilience
Increased natural-disaster severity has many outside of insurance asking whether or not some communities should be uninsurable.
The investigative news outlet Politico recently examined federal flood insurance and disaster management programs with an eye toward uncovering whether such programs are too bureaucratic to make an impact.
The Miami Herald warned readers that they “probably don’t have the right insurance” to cover another natural disaster on the scale of Hurricane Ian.
And on the cover of its Sunday edition, The Denver Post recently outlined a proposed state program aimed at curtailing the recent problem of homeowners in fire-prone areas of the West having trouble finding insurance for those properties.
These are just three examples of mainstream media outlets in recent weeks taking on the question of how climate change continues to impact the insurance business and its policyholders.
Often, however, such reporting falls short when it comes to conveying an understanding of exactly how insurance works or the level of disaster-response expertise within the insurance industry.
The Politico exposé published Nov. 25, 2022 opened with a firsthand account from homeowners whose dream house constructed in Oklahoma’s Arkansas River floodplain was destroyed in 2019. The homeowners knew the area was considered a “100-year floodplain” but figured they had many decades before catastrophic flooding could become a problem. Instead, they lived in their home just two years when torrential rains put the place under six feet of water.
The piece reported that government at all levels is now taking a keen interest in the issue of property resiliency. “The interest level has never been higher,” Rob Moore, director of the water and climate team at the environmental group Natural Resources Defense Council, told Politico.
The Miami Herald article published Nov. 30, 2022 outlined a problem about which insurance and risk management professionals have long been aware: The gap between the property coverage many policyholders have and what they’d need should they become the victims of a natural disaster. “People just expect to be protected… It’s very distressing and upsetting for them to find out they paid the premiums and don’t have the coverage they need,” Nancy Watkins, a principal and consulting actuary with the Property and Casualty Practice in Milliman’s San Francisco office, told The Miami Herald.
The Denver Post article dated Nov. 27, 2022 described an environment in which high-country residents and officials are just beginning to understand the changing insurance landscape due to increased wildfire risk. One proposed solution afoot in Colorado is the establishment of a state-sponsored insurance pool for property owners who are unable to secure coverage on the open market.
“Up until the last 10, 15, 20 years… We didn’t have catastrophes in the mountain west,” Carole Walker, executive director of the Rocky Mountain Insurance Information Association, said in the article. “That’s obviously changed.”
Journalism such as this does more than issue a public alert: It demands that reporters pay attention to the insurance business and gain a more thorough understanding of how insurance works. This can lead to productive conversations with insurance carriers about realistic responses to natural disasters, which ultimately must develop from collaboration between the industry, government and the private sector.
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