The cost of increasing natural disasters due to climate change is not only counted in terms of human life, but also the peripheral industries that deal with disaster mitigation, such as insurance. According to an article in Vox, the rise in natural disasters may have an affect far beyond the country’s borders where the incident occurs. “People will no longer just have to prepare for intensified versions of the natural disasters they know, but they will also have to consider the possibility of new types of disasters — floods, storms, heat waves, droughts, and fires — impacting their community. And since most US insurance companies are backed by international reinsurance companies that cover other parts of the world, homeowners everywhere will pay the price for climate change’s global effects,” writes Rachel DuRose in Vox.
Some insurers are seeking their own insurance, or reinsurance, according to the article, which eventually trickles down in price to the policyholder. As some areas such as Florida become even more susceptible to natural disasters, some insurance companies are taking it one step further and ceasing coverage to the area. Vox quotes Jason Thistlethwaite, a professor for the School of Environment, Enterprise and Development at the University of Waterloo as saying that some of the reasons these insurers may pull out of these markets may include “inadequately designed infrastructure, the increasing number of people living in high-risk areas, and the soaring costs of reconstruction.”
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