Don’t Believe in Global Warming? How’s Your Homeowner’s Insurance?

Tornado damage in Garland, TX

Hurricane Hermine slams Florida. Thousand-year flooding in Baton Rouge. Wildfires tear across four drought-ridden states.  A lot of scientists are pointing out that they predicted this would happen, as a result of global warming.  Even if you think it’s a hoax, your homeowner’s insurance company doesn’t.  So if the science doesn’t convince you, maybe your wallet will.

The Number and Cost of Natural Disasters are Increasing

The National Oceanic and Atmospheric Association (NOAA) has posted a listing of all the natural disasters since 1980 that caused at least $1 billion worth of damage.  We’ve turned that into the infographic below, showing the number of billion-dollar disasters per year.

Natural Disasters Chart


The size of each dot shows the relative cost of all the disasters for that year (adjusted for inflation), running from $1.1 billion in 1981 to $204.9 billion in 2005.  See that red line?  It shows the average trend over time: the number of major disasters is increasing exponentially with time.  In other words, on average the number of billion-dollar disasters in the U.S. is increasing faster every year.

Think the government is lying to you, because global warming is a massive conspiracy?  Let’s check the insurance industry.  Here’s a graphic from the reinsurance company Munich Re (whose NatCatSERVICE provides data to companies worldwide), showing the global number of natural disasters since 1980.  Note that the number of geological disasters (earthquakes, volcanic eruptions) has been pretty constant.  It’s the weather-related ones (storms, floods, drought, fires) that have been steadily increasing.  In fact, the number is increasing exponentially, as shown in the yellow line (which we fit using fancy linear regression).

The number of natural disasters is increasing exponentially worldwide.

So has the cost.  In this next graphic (also from Munich Re), the worldwide financial loss from those weather-related disasters is clearly increasing.  And yes, again the cost of these disasters is increasing exponentially (shown in red).

Global cost of natural disasters and amount covered by homeowner's insurance companies.

Any way you slice it, both the number of disasters and their average economic damage to people like you and me are growing each year.

Have you checked your homeowner’s insurance bill lately?

The Insurance Information Institute notes that in the U.S., insurance companies paid out $13.1 billion for claims from natural catastrophes in 2013.  That rose to $15.5 billion in 2014, and $16.1 billion in 2015.  It’s projected to be even higher this year.

Where does that money come from?  Your wallet.  Because no matter what kind of insurance you are talking about (automobile, homeowner’s, medical, malpractice, umbrella), these companies exist to make a profit.  That means the more they pay out from claims, the more they charge customers the following year.

This isn’t chump change either.  The total economic cost of just the 196 billion-dollar disasters we showed above comes to a walloping 1.1 trillion bucks.

Maybe your bills haven’t gone up in a while, but insurance premiums have been going up nationwide.  The Insurance Information Institute reports that homeowner’s insurance premiums have been steadily increasing, generally much faster than inflation: 4.8% in 2005, 5.2% in 2006, 6.0% in 2009, 7.7% in 2011…you get the idea.

So whether or not you believe in global warming, something is making the planet more dangerous every year.  And that’s costing you real dollars.  Maybe just a little each year, as your automobile, hurricane, fire, flood, and homeowner’s insurance steadily cost more.  And then a whole hell of a lot when a totally unexpected storm wipes you out.

How much of a gambler are you?

Most Americans have really solid automobile and homeowner’s insurance coverage because they aren’t big gamblers.  We don’t want to leave the fate of our daily transportation and the roof over our heads up to chance.

When a lawmaker walks into the Senate with a snowball and declares global warming is a hoax, he isn’t just displaying scientific ignorance of elephantine proportions.  He’s gambling away everything you own. Everything your mom owns.  And everything you want to pass down to your kids and grandkids.

Are you going to stand for that?


Featured image from: tornado damage in Texas;

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