Considering the recent events in Western North Carolina including Asheville, Vermont, and other climate safe havens such as Boulder to name a few. Intensifying monsoonal rain patterns, wildfire patterns, and severe weather is making previously modeled ‘safe haven’ cities and regions extremely unstable places to be. In many cases, such as Asheville, they’re fairly remote, and the city has was practically cut off in all four directions, accessible by only helicopter for a period of time. Making it all the more ironic, the Washington Post dubbed Asheville the 'climate city' for its role in resilience and climate research.
Other areas which were previously viewed as climate safe such as far inland areas of Iowa, Kentucky, Minnesota have all began to experience extreme climate events which are pushing coverage companies into unprofitability.
If even these ‘climate resilient’ places are experiencing these kinds of losses, it’s safe to say the financial system that undergirds them will have to radically change. This could lead to terrible outcomes for entire swaths of the US. One system that is beginning to develop is ‘bluelining’, or sanctioning entire areas as uninsurable and therefore reducing uncertainty. The name is taken from a historic policy known as 'redlining'. This practice occurred as a discriminatory tool banks used in the early 20th century to prevent minority groups from accessing financing in what they deemed ‘declining neighborhoods’.
As the previous piece points out, it’s likely to create hyper-inequality as entire communities, or even entire regions many of which were already disadvantaged, are now deemed uninsurable from bluelining. If there is no access to coverage, there’s no access to money via banks such as mortgages or even access to their own home equity through a line of loan.
One enterprise I’ve seen beginning to implement widespread bluelining is Moody’s. It has been acquiring companies such as RMS and 427 which puts them under one umbrella to offer ‘climate uncertainty management’ to customers. This isn’t going to create a more equitable or even a stable socio-economic system in the face of advancing climate change, instead it will create fiefdoms and enclaves of climate 'safety' which will be insured, while the rest will be left in bluelined ghettos. The decisions of insurers to stay in certain areas will be based on the ability for their policy holders to pay. This will kick off another round of inequality as it's likely only the top 10% or less of households will have the ability to absorb the cost-burdens of climate change.
While the coverage system could ‘collapse’, what it is more likely to do is shrink, grow ever more expensive, and ultimately begin to choke off expansion. The system of capital we live under requires borrowing, loan, and coverage to expand, and removing the coverage pillar will grind that system to a halt. It will create a multifaceted and complex expansion of inequality and impoverishment with few services other than massive state spending. With no plans to even begin decarbonization in the near future, this is likely the shape of things to come.
SS: This is my attempt to explain the current situation of the US insurance and financial system in the face of massively accelerating climate change and natural disasters. Bluelining via ‘climate risk management’ systems, exploding risk of fixed assets such as real estate and other property, and expansion of state insurance systems are posing an existential challenge to the capitalist system. It will lead to mass impoverishment of the everyman as they’re locked out of their home equity and insurance retreats from every corner of the county.
It’s likely ‘climate risk management’ will be the solution that Wall Street firms such as Moody’s propose, and it will cause mass impoverishment. Collapse related due to the proposed risk management systems being entirely unethical and information asymmetric. It could reshape cities, the economy and society entirely into an even more unequal system than today as the system of capital begins to digest the new reality of an unstable climate everywhere.
I will say this is a bit of a US-centric post, but expect this same system to be implemented in different parts of the world if it proves successful here.
Upper midwest. Insurance increased last year by 35%.
This year it is another 25% increase. These increases are beyond any raise either of us got at work. We already cut the budget. No streaming services, no subscriptions, no alcohol, no drugs or smoking.
We pay for car, car insurance on one vehicle (thank god for good quality ebike), our house and our healthcare. We grow veggies to cover costs and cook at home.
Our budget is getting tighter and tigher. We both work. We are in decent heallth, a few small things here and there but both able to work and do so full-time. And now this.
I do not write this to complain. Just to say, we are really good with living pretty cheap and this hits hard year after year and we are really far away from the catastrophic events.
Yes, our area has had tornadoes and lots of hail. But we also have a waiver on our roof as it is metal and carries a lifetime manufacturer warranty and we have not had an insurance claim on our house so…..
I can understand bluelining in areas where climate related disasters are precedented. Areas in Florida with hurricanes and flooding, Iowa’s tornadoes and severe storms, fire risk in California. But what will the industry do in places where some sections of a region might be at risk of flooding but other sections are on hills and not at risk of floods. Is it granular enough to differentiate? And if insurance to private owners is disappearing then I suppose it opens the door to corporate buyers who can self insure?
I live in Eastern Canada. Our insurance shot up over the past few years due to the claims from the fires in Western Canada apparently… I suspect it was mainly due to corporate profiteering, but they did use the climate related disasters as an excuse…
That said, in much of the USA the economics of insurance are going to make it unaffordable regardless of the profiteering.
A hurricane worse than Sandy hitting NYC will probably be the black swan to trigger the insurance market demise. Or a big one destroying large swaths of Miami. Aka commercial real estate insurance.
itll be a nice way to create petri dish communities for organised crime to grow.
I’d rather live in a climate risk uninsurable house that I can pay off and self-insure then pay 800K and have to work a high stress job to afford it for the rest of my life. If only asking prices would reflect the coming reality…
> This isn’t going to create a more equitable or even a stable socio-economic system in the face of advancing climate change, instead it will create fiefdoms and enclaves of climate ‘safety’ which will be insured, while the rest will be left in bluelined ghettos.
I’d been imagining uninsurable homes would be bought up by the rich with cash for pennies on the dollar, but while I’m sure that will happen in many places the other people who will buy them up are slum lords like the folks using apps to buy properties and rent them out. Buy up properties and then spend the bare minimum (or less) on maintenance, hoping that by the time they finally get condemned or destroyed you’ll have made back several times what you spent on them. Then when they do get destroyed demand the government bail you out because you were “generously” providing housing to low income people.
Everywhere is safe haven if you are rich. Nowhere is safe haven if you are poor.
People hit hardest by this will also lack the means to move to a cheaper location, one where insurance premiums are lower. It is a double whammy because those who will be unable to afford insurance in the long term are going to be those who need it most. People could end up homeless come the next disaster because their house is destroyed and they have no way to rebuild.
Here, some nice history to read:
[Resilient Societies, Vulnerable People: Coping with North Sea Floods Before 1800* | Past & Present | Oxford Academic](https://academic.oup.com/past/article/241/1/143/5049207)
>On Christmas Day 1717 the North Sea area was hit by the most deadly flood disaster in its entire history, which took the life of more than 10,000 people. Present-day concerns over climate change and the recurrence of extreme weather conditions might tempt historians to discuss floods like 1717 in terms of the overall vulnerability and resilience of societies or ‘socio-environmental systems’. However, in medieval and early modern Europe it is hard to find examples of societies which did not prove resilient in the face of flooding: through absorption or adaptation, coastal society as a whole was perfectly able to overcome periodic episodes of flooding even when such episodes were sometimes perceived as real catastrophes. At the same time, however, coastal societies differed greatly in the number of people exposed to harm and suffering. Processes of political and economic marginalization, as well as unsustainable forms of land-use, turned some people into victims of flood disasters, while others escaped. Hence only by moving discussions of vulnerability and resilience from the level of societies to the level of people, can a better understanding of natural hazards and disasters in the past and at present be achieved.
You touche on the government subsidizing insurance.
FL is already doing this. At some point the beds will step in and subsidize, still allowing the connected insurance companies to take off the top. At a certain point the feds will not be able to meet all of their obligations and that will fall off.
A continued acceleration of climate change could make that day come sooner than later, as does our ever declining political system that could become radically worse than our current plutocratic rot, monetarily the feds will spend more and more while cratering the economy and businesses and wages leading to Less in flows and the FEDS will not be able to keep up without printing enough money to devalue the currency.
Sooner than forecast I bet.
As a life-long Minnesotan, climate relislience isn’t just about being “free from disasters” because no area is free from risk. But there is a big difference between things like Hurricane Helene hitting mountain/valley communities and hail storms in Minnesota. Areas with hills and valleys will always be high risk for floods because of the nature of water, along with the tendency for humans to dam up the mountains like crazy and associated risks for dam failures.
But anyhow, it’s also about resource access, and that is a big part of why MN is on the list. We have a lot of fresh water and other well-managed natural resources. But winters are hard to survive outside of our modern lives. And of course, those resources won’t last long if throngs of people move to any of those areas. I think the people living in those areas are going to defend them to the death if they feel the need. It’ll turn into scenes where communities gate themselves off and refuse to let people in to protect their resources. It’s going to get ugly all around. It’s kind of “funny” how many people seem to think that people who live in the somewhat less risky areas will just open the doors for others to move in. They won’t. They will try to wall off their communities, they’ll end up in fights with government/military about refusing to let people in. Those lovely scenes in movies like Day After Tomorrow where Mexico happily opens its borders to all the US refugees? 😂 That is not human nature.
We all deserve to suffer
Insurance is at the front lines of the climate crisis. Probably one of the few areas of the corporate world to properly recognize and evaluate the unfolding situation.
[Collapse of the US home Insurance System](https://www.collapse2050.com/collapse-of-the-u-s-home-insurance-system/)
I live in south central Kentucky. Seeing this happen at the elevation of Asheville is just mind blowing and scary. I thought all of us in the Appalachians might have a chance. I used to go to camp in Black Rock, outside Asheville, and I have friends in the area. It is terrifying.
Also insurance companies realizing they have inelastic demand and they can raise prices as much as they want
Government needs to come in, eliminate private insurance, and make it a public socialized system.
In the era of collapse profit mindset is sociopathic.
Bluelining is fine. We need governments to openly recognize these areas as sacrifice zones, and provide relocation assistance to the people that live within them. People with means will liquidate their holdings there, and move themselves to higher ground.
If we keep dumping funds into subsidizing or developing high risk areas, the costs will be even higher later on.
So realistically, the only viable solution on the table would be to nationalize insurance and spread the risk across the entire population. Probably wouldn’t cost anymore than it already does to be sustainable since the profit element would be eliminated.
60 Minutes did a story tonight, specific to Hurricane Ian. [https://www.cbsnews.com/news/florida-whistleblowers-hurricane-ian-insurance-60-minutes-transcript/](https://www.cbsnews.com/news/florida-whistleblowers-hurricane-ian-insurance-60-minutes-transcript/)
Meanwhile the only political hope we have isn’t even mentioning climate change 🙄
You know what they say:
_follow the money_
We really are living through something that feels like the opening chapters of some horrific dystopian novel.
“It is the future, and humanity has gone nearly extinct due to climate change. The world’s governments failed to reach any consensus on dealing with the problem, and ultimately, proved useless. Now the few remaining humans fight viciously for what remains of the food, water, and air still available on this dying planet…”
Here’s a person thinking they’re smart saying a lot of words that are absolutely nonsense
This is true collapse unfolding nice a slow before our eyes! Hold on to your butts! My stomach is in knots now with almost every storm. My state is no stranger to disaster but doesn’t mean I want to endure it again and again. And poor Asheville! That place will never be the same. Most people had no idea their area could be such victim to climate collapse. 😔
Of course there is no such thing as a “safe haven”. The moment a place becomes known as a “safe haven”, thousands of people move there, straining resources and local services, meaning it is no longer safe.
It’s time to start thinking of a better system to deal with the developing challenges of our world…