What is happening to the weather?

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For the last year, the US has been focused on healthcare. Politicians of all shades of opinion have been pitching in on how well or badly the insurance industry serves the people when they are injured or fall ill. This has diverted attention away from the other hazards and perils supposedly covered by insurance policies. Go back to 2005 and Hurricane Katrina forced the question of insurance against weather perils on to the national scene. Katrina was one of the most devastating hurricanes of all time, and it forced Americans to have another more detailed look at who should pay for losses when the weather comes into town. For months, there were headlines about seemingly high-profile cases being fought through the courts on what exactly was covered as storm damage. Then, it all faded away. People may still struggle to find storm and flood insurance depending on where they live, the policies may be written in ways that limit the insurers' liability, but the news media has moved on to other problems. For now, you are on your own.

Why should this matter now? Well, this December, the world is meeting in Copenhagen to discuss what to do about global warming. You might remember Al Gore's documentary, An Inconvenient Truth. No matter what you might think of Al Gore as a politician, there is one clear truth. The rest of the world takes the issue of global warming as a serious problem. The accumulating body of scientific evidence is undeniable and the potential consequences are devastating. For example, if the average temperatures rise by more more than 2C, the world will remain a reasonable place in which to live. But if the temperatures rise by 4C, large parts of the Earth will become uninhabitable. Yes, yes, you say. This is all well and good, but how does it affect me? The answer is that your premium rates are going to rise.

The weather patterns are changing. Storms and floods will become more frequent and severe. As temperatures rise, there will be more rain associated with all storms. Look around. Are federal and state teams actually investing in flood management defenses as a priority? Are sea defenses in low-lying areas being improved to guard against storm surges? Are hillsides being reinforced to reduce the risk of landslides? Are drainage systems being expanded in towns and cities to channel excess surface water away from inhabited areas? The answer, sadly, is no. With budgets in deficit at all levels of government, investing in storm protection programs is not seen as a high priority. So your home insurance premiums are going to rise not just because the risk of losses from the weather is increasing, but also because the insurers will need more capital to pay out on the increasing number of claims when the storms hit. When you get home insurance quotes, make sure the proposed policy will cover you against weather damage in general and flood damage in particular. You are warned that, depending on where you live, cover may either be excluded altogether or hedged by limitations making it very difficult to claim. When you get your home insurance quotes, also ensure your projected rebuilding costs include damage to the foundations and repair to the structure caused by flooding.

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