Climate Change and Insurance: Safeguarding Property and Health in an Unpredictable Future

As climate change intensifies, it is creating increasing risks that affect both property and health, with potentially far-reaching consequences for individuals. The insurance industry is already grappling with the reality of rising premiums and unendurability in high-risk areas, driven by extreme weather events such as floods, wildfires and heatwaves. For example, in Australia, it is predicted that one in 10 properties will become uninsurable within the next decade, up from one in 20 today. Some homeowners in flood-prone areas are facing premiums as high as $20,000, making them effectively uninsurable. As more properties become uninsurable or unaffordable, homeowners in these areas face greater financial vulnerability, especially as property values in these regions decline.

These same climate risks could increasingly impact health. Extreme weather events can result in direct fatalities, such as deaths from floods, wildfires and heat-related illnesses, but possible long-term health effects of climate change – like respiratory diseases from wildfire smoke, heatstroke and the spread of infectious diseases due to flooding - can also lead to increased mortality rates. As the frequency and severity of these events rise, life insurance becomes a crucial safety net, offering financial protection for loved ones in the face of unforeseen circumstances.

Additionally, in high-risk areas, life insurance can help shield individuals from the broader economic instability caused by climate change. As property values in vulnerable regions drop and mortgages become harder to obtain, having life insurance can provide critical financial security, especially for families facing hardship. Climate-related risks such as health impacts from extreme heat or natural disasters, may also raise the cost of healthcare and long-term medical expenses, making life insurance policies that include critical illness or long-term care coverage even more valuable.

In this increasing unpredictable climate-altered world and its potential to disrupt lives in numerous ways, like insurance could serve not just as a precaution, but as an essential toll for financial resilience. A critical investment for safeguarding families against both immediate and ling-term risks.