Record global temperatures and U.S. billion-dollar disasters
climatecentral.org
climatecentral.org
But more importantly, this needs to be as a percentage of the total infrastructure (or real estate to make it easier to compute) in the area.
IIUC as a percentage of total real estate value the amount of damage has been going down over time, as one would expect.
Someone below points out that inflation alone wouldn't explain the growth though and beyond that someone else notes its adjusted for CPI.
Frequency at a moderate severity level is much more stable and can give better insight.
As other posters already pointed out, the severity of the events should be adjusted for inflation, building characteristics, and total exposure.
No climate change? No problem.
Since that's not going anywhere, something has to give. A renegotiation of the distribution of previously externalized costs between insurers, government, and society is inevitable.
That's a failure of government.
>IIUC as a percentage of total real estate value the amount of damage has been going down over time, as one would expect.
You could plausibly tell a story with the absolute numbers though. For instance, if people are increasingly building and/or moving to disaster-prone places, that would still be bad, even if damage as an absolute % is lower. However, after reading the article and skimming the site it seems like the general narrative that they want to push isn't that, and is instead something along the lines of "climate change is real and is causing so much harm, look at all these disasters!". I believe in climate change and think it's causing serious problems, but I'm also against shoddy reporting, even if it's for an agenda that I support in principle.
Which should not pay to rebuild there. Sure, pay to relocate/rebuild somewhere insurable.
If you can't get a private company to insure you, the government should (and does) insure you as a last resort, usually more expensive than any commercial insurance but still at a loss. But, paying out just to rebuild in the same spot is idiotic. The program should only pay out if you use that money to relocate and/or rebuild somewhere where you can get commercial insurance. If that means you need to move, so be it.
If you can just pay out of pocket to rebuild every few years, that's fine. It's not a human right to live on a beach in a state that gets nailed by a record-setting hurricane every 3 or 4 years (and several times in between).
Plenty of places in the state which are insurable, and at minimal risk, but are getting steamrolled by insurance increases. A good chunk of that is roofing insurance fraud. Nobody pays to reroof anymore out of their own pocket.
Rate increases for insurance in lower risk zones are what pay for repairs in higher risk zones. How many rate increases will it take before most people can't afford insurance? 76% of Florida's population lives in coastal counties[1] and if the remaining 24% of the population has to pay more to insure those high risk coastal properties, but can't (or won't) then it sounds like there is at the very least an insurability crisis which needs addressed.
1. https://www.usgs.gov/centers/spcmsc/science/florida-coastal-...
Most damage is from flooding due to storm surge which exists on coastlines. Wind and power outages happen and can take down trees just like elsewhere in the world but the massive destruction is caused by the force and amount of water on the coasts.
Building codes exist on probability of what can happen. When buildings were built, they had codes to follow based on the current time. When they are destroyed, they are rebuilt with new codes such as on stilts, better windows, different materials, etc. It isn’t like we just keep building the same building and expect things to change.
If you do live on the coast anywhere in the US, it should be a general assumption that at some point, that water is gonna be in your house or that your house is gonna be taken out by the water over its existence.
Just because a hurricane hits Miami doesn't mean the entire state feels it. It rains, streets may get backed up with water around the sewer just like there was a thaw of snow in northern states. You would be surprised how much of a city on the water is not in a flood zone.
You want to live on the water, you are mandatory to pay the fees to maintain insurance if you have a loan or if you own, you can roll the dice and not. Each storm causes areas that may have not been hit in decades to have higher premiums and areas that have never felt a storm in decades that are older builds get knocked down and rebuilt with new code and higher up to prevent another wipe out.
Like, virtually all "disaster aftermath" footage from choppers and drones shows the remains of homes that would get you yeeted out of the planning authority's office here in Europe.
Maybe, but it's my tax dollars. I'm willing to grandfather in an existing home, but I'm not going to pay to rebuild with upgrades, and I'm not willing to pay a dime for the same property again in the future.
The rest of the country should not subsidize people living in high risk places.
And now some parts of California are also becoming uninsurable for wildfire risks. More and more homeowners are switching to government subsidized minimal coverage plans as commercial insurers increasingly refuse to write.
What we'll probably end up doing in Florida, California, and other vulnerable states is further tightening building codes so that structures are more resilient to natural disasters. Better to build something durable than to use insurance money to rebuild after every major disaster. The downside is that this will make housing even more expensive in areas where there are already critical shortages.
That's just FUD from the insurance industry. The vast majority (97%) of California home owners still have a competitive private option and the California FAIR plan insurer of last resort is a little more expensive but fully self funded, unlike the NFIP. To my knowledge it has never been bailed out by taxpayers since it was introduced almost sixty years ago. Most of the remaining 3% are in such remote areas they don't even have municipal fire fighters.
My parents have the FAIR plan in an exurb that hasn't burned in over a century and has had a major nearby wildfire a few years ago, but their immediate neighbors have private fire insurance. They have agreements with their insurers to kill all the small and medium sized plants on their properties with roundup, creating a 50-100 ft fire break around the houses. Since my parents bought the property to grow food on a ten acre homestead, they pay a little extra for the FAIR plan instead of killing everything.
Earthquake risk is hard to evaluate because of all the retrofitting. I'd be more worried about Seattle/Portland but yeah everyone just assumes California will be bailed out when the big one hits (just like we've been bailing out the East and Gulf coast for decades)
If the non-hurricane damage is independent, then you expect $(1/n * cost of major hurricane) additional costs next year. In a major hurricane year, you expect (1-n)/n fewer such hurricanes next year. And therefore you expect less expensive damage.
One could debate whether "likely to be worse" is correct. If there's a a major hurricane every 10 years, there's only a 10% chance of it happening next year. The expected value of the damage is higher, but it's still "unlikely" (as in, less than 50%) to happen at all. So it's expected to be worse, but unless there's over 50% chance of a major hurricane per year, it's not likely to be worse.
If year-to-year hurricanes are also independent, then knowing that there was or was not a hurricane this year, it's also no more or less likely that a major hurricane occurs next year then it was looking forward to this year, as of this time last year. But, I don't know if that is an independent thing.
Not if hurricanes are independently and identically distributed. Which I think you acknowledge could be the case in your last paragraph, but I have not ever come across anything linking hurricane to one another.
A gambler's fallacy is thinking getting 0 this year means it's more likely than 1/n next year to act to retroactively "correct" 0 this year.
1. Each hurricane is an independent event. Florida expects 5 hurricanes per year on average. There were 0 hurricanes this year, so by definition we can expect more hurricanes next year (because 5 > 0). However, the fact that there were zero hurricanes this year doesn't influence next year's season in any way. The statement is just trivially true.
2. Hurricanes are not independent of each other, but rather get stronger the longer you go without one. So if there were none this year then you will likely bear the brunt of it next season. I know this is a thing for earthquakes and other tectonic activity, but not sure if hurricanes work the same way.
What is meant is that since Florida didn't have a major hurricane this year, then next year is likely to be worse than this year, since Florida has a significant chance of being hit by a major hurricane each year.
In other words: the "real" cost is probably somewhere between the CPI-adjusted figure and the inflation-adjusted real estate speculative gains. But either way, the trendline is the same.
No, not "curiously". More like "maliciously"
Make out of it whatever you like, science tells us that climate change will erode our infrastructure and it will cost more than not doing anything.
It now goes along the lines of “weather has always fluctuated dramatically since the ancient times and this is no different” without skipping a beat or admitting to pushing a counter-productive agenda for the last 20 years.
An extraordinarily big catastrophe would probably hold the record for a few years until the next above average events happen.
Our problem seems to be that the underlying distribution shifts fast. What once was a catastrophic freak event, is now barely average.
15% of all their incredible trees were destroyed.
But it's not the same time of existential flooding that can happen in Miami or Houston...
From a pure geographic perspective we ought to have a huge, thriving city at the confluence of the Mississippi and Ohio Rivers. But instead there are only a few struggling small towns like Cairo, IL. This is almost entirely a political problem.
Southern US states like Florida are becoming uninsurable due to climate risks raising the price above what residents can afford, which raises insurance costs for the rest of us in other states. The same thing is happening with car insurance, where the wealthy drive up prices on new vehicles to $50-100,000+, forcing the rest of us to carry higher liability coverage. And with medical insurance, where poor lifestyle choices, environmental threats like pollution/preservatives and monopoly pressures from not having universal coverage cause those of us in good health to pay $6,000/yr or more and a multi-thousand dollar deductible, which mostly defeats the point of having insurance.
My feeling is that we'll either set reasonable limits for what will be reimbursed (around the the median cost of what's being insured) or insurance will divide into a two-tier system where the wealthy are covered by gold plans while the poor pay to keep the system going and receive pennies on the dollar in coverage. Which is why I feel that tying the price of insurance to income might solve many of these problems.
But insurance used to work, so I feel like there's a deeper explanation or solution that I'm not seeing.
NFIP has been in place since 1968. These low lying, flood and hurricane places have not been insurable for 50+ years. All the other federal taxpayers have been subsidizing people living there.
https://en.wikipedia.org/wiki/National_Flood_Insurance_Progr...
An insurance company's one and only incentive is to charge as much as possible while paying out as little as possible, iow to profit as much as they can. Actually protecting the client or their property does not factor into the equation at all.
If we nationalized insurance, maybe the entire country can subsidize these extremely high risk areas. We can also add a legal mandate that insurance not operate for profit, and should change premium rates to scale up and down with the real amount paid out. Or something, I'm no money surgeon.
And before someone blusters about paying for other people's shit: yes, that's what a healthy society does. We should all care about the wellbeing of others. Feel free to propose an alternative solution that doesn't involve depopulating all of our low-lying lands and dumping those citizens somewhere with no housing, no job, and no money and just ignoring the suffering and death this will cause.
What ought to happen (IMO) is that the first clause and the second clause should be divorced from each other. If insurance premiums are unaffordably high in Florida, people in Florida have the choice to pay it anyway, self-insure [if they're able], move, or start another insurance company to try to drive down prices.
Smart insurance companies, if they can't make a profit in Florida, should pull out of Florida rather than subsidizing losses in Florida with increased profits (read: higher premiums) in other states.
Smart consumers in other states will place their policies with insurance companies who are not subsidizing actuarially unsound risks in other states.
If your auto insurance company said "even though actuarial data supports its use, we're going to stop using DUI convictions and other serious traffic convictions to influence rates. We expect this will garner us significant new business from a population currently being charged more money for these surchargable events at only a modest increase in cost for other customers" and you were a driver with no such events on your record, would you at least shop for another insurance company? I would. (My insurance company has already stopped writing new policies in Florida and, from what I can tell from a quick Google, is only renewing existing policies for owner-occupants of those properties.)
[1] https://www.nytimes.com/2023/10/12/realestate/as-natural-dis...
Asking questions is good, but some of you should actually make an effort to answer your own questions.
Knowing nothing else, do you have enough common sense to figure out if your pet theory actually makes sense?
Have you simply tried comparing inflation rates with the rates of reported damage?
Seriously, try it. Critical thinking start with your own conjecture.
Yes?
But it is hard, because some things do need data, and I honestly don't know where to find that.
For example, Florida has a huge insurance and insurability problem. People here Florida and immediately assume hurricanes. But I'm hearing of issues in areas that rarely see a lot of destruction from hurricanes.
OTOH, I hear a lot about roof damage from wind and hail lately. And there are more roofers using storm chasers than I've ever seen. Is this a significant factor? Is the data available?
I also hear about limits on the ability of insurers to raise rates on existing homeowners. Supposedly this conflicts with rises in property values that are greater than the rate increases. Is that true? I see a lot of conjecture, but little proof.
Needless to say, the process has been significantly streamlined to help homeowners deal with claims and get their roofs fixed, mostly to the benefit of the bigger stormers.
I can’t provide publicly available data, but when you look at the aftermath of these storms from an arial and satellite imagery perspective, you will see these events have grown in terms of objectively destructive impact.
I’m not suggesting there haven’t been dozens of other factors that have inflated the financial impact (codes, costs, appreciation, etc.).
My guess is the cumulative impact accounts of these other factors accounts for less than half of the financial impact, but I have honestly not looked at the data.
Shouldn't we be looking at wind speeds, time spans of events, precipitation records, water level increases and other such values instead of anything having to do with economics? Watching a friend of mine dealing with insurance companies after a house fire I can guarantee that the values coming out of such processes aren't as tied to reality as we'd like to think.
The reinsurance company actuaries will enforce those.
You'd have to knock over an Artemis rocket on the launcher or something.
In performing these disaster cost assessments these statistics were developed using the most comprehensive public and private sector sources and represent the estimated total costs of these events -- that is, the costs in terms of dollars that would not have been incurred had the event not taken place.
So these are numbers that were revised by consultants to be higher, aren’t just a measure of the direct impact of the event but of some made up estimate of what would have been the economics had it not taken place as “economic damage,” and built on comprehensive but uncertain data that is then compensated for with a model overlay that isn’t disclosed or discussed.
This is a case where the more comprehensive the model you develop becomes, the higher your estimated economic impact from events correlates.
Also the data is cpi adjusted. The part that’s left out is that they are including the kitchen sink and estimated damages to economic activity not actual damage, which is a methodological change to how damage is estimated and much higher — so it looks more expensive than historical events.
I’d really like to see more objective effort in the design of this research as it smacks of agendizing the conclusion a little. Especially considering that the methodology for calculating economic losses was designed to produce a report called US billion-dollar weather and climate disaster loss estimate report (NCDC 2014). What were they going to do? Develop models that didn’t hit the billion dollar threshold?
Especially when basically this is all designed around “Monte Carlo simulations,” which is a fancy-pants ways of saying “we used excel to produce an average with AVERAGE, STDEV.P, and VAR.P functions.” The problem there is that a Monte Carlo simulation requires assigning accurate and unbiased sources of multiple data input values to create a model of “uncertainty” or risk, and then it spits out results by averaging the outputs to obtain an estimate. But the results of a Monte Carlo simulation are subject to statistical variability. While the simulations provide estimates and probabilities, they are not precise predictions and it’s easy to change the outcome by selecting different inputs.
It shows by adjusting for CPI and inflation! Oh wait. Some cities are just getting bigger.
It is obvious by increasing temperature reading stations by 14,200 since 1973. Oh wait, most are near heat-producing urban areas.
It doesn’t show when adjusted by population density as well, … yet.
Don’t worry, climatologists are still looking for that Holy Grail (statistical outlier).