Climate Change Causes 30% Increase in Insurance Policy Costs
According to the Telegraph, the Association of British Insurers (ABI) is working on a report predicting a 30% rise in insurance premiums.
Current climate models and predictions show strong evidence that we will see more and more extreme weather events as temperatures rise due to global climate change.
Extreme inland floods are currently expected to affect the UK once every century. Should global temperatures rise by four degrees, as is widely expected, the frequency and thus cost of these floods is predicted to rise by 30% to£5.4 bn.
An increase in weather related insurance claims will mean that insurers require more capital to cover claims. Policy holders are also likely to have to wait longer for their claims to be processed. The increased financial pressure that insurers will find themselves in, may see the number of loss adjusters employed by insurers rise. Loss adjusters work on behalf of insurance companies investigating claims and achieving cost effective settlement, cost effective for the insurer, of course, not the policy holder. Loss assessors, on the other hand, represent the insured and their interests in the event of claim.
With global warming now a regrettable reality and affecting us in ways we never thought of - such as said rise in policy costs - those anticipating claiming insurance for weather related events should make sure that they are covered and build the rise in policy cost to their claim figure.
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