John Gibbons: Climate change leaving homeowners struggling to get home insurance

Accelerating climate change means the risks are increasing, in scale, frequency and in unpredictability. That is why some of the major US insurers are now outright refusing to cover climate-related risks.

Hurricanes, wildfires and flooding disasters have pushed insurers into crisis and bankruptcy in several US states, with homeowners struggling to get cover at almost any price.

For most of us, most of the time, insurance is just another bill that drops on the mat once or twice a year for our home or car. And while sometimes it might be tempting not to bother renewing, the nagging possibility, however slight, of being financially wiped out by a catastrophe, such as a house fire or major flood damage, means we keep on paying those annoying annual premia.

Risk mitigation is big business. Globally the insurance industry is a behemoth, with annual revenues approaching $5 trillion and up to $25 trillion in reserves and investments. Being able to offer insurance means understanding the nature of risk exposure and the probability of claims not exceeding income and reserves.