Thursday, July 30, 2009

Insurers blame climate change for rising costs

Andrew Donoghue in Business Green: Businesses that may already be struggling to comprehend and comply with climate-related legislation will soon face another environmental burden – rising buildings insurance.

That is the conclusion of the latest quarterly study from the AA British Insurance Premium Index released this week. Although the survey only tracks home insurance providers, its findings are likely to be mirrored in the commercial sector, which is similarly prone to the increased incidence of flood and storm damage that the study identifies as the main driver behind rising prices.

The report reveals that the average quoted premium for an annual building insurance policy has risen for the sixth successive quarter. It now stands at £223.92, a 2.5 per cent rise over the past quarter and 10.1 per cent over the past year, according to the AA.

Simon Douglas, director of AA Insurance, said insurers are beginning to reflect concerns about climate change in their pricing. "The industry is expecting rising cost and frequency of claims for flooding, subsidence and storm damage," he said. He added that it is not only high-risk areas which are facing increasing premiums due to the threat of flooding. "Compared to the first six months of 2008, there has been a 15 per cent rise in the number and cost of payments for buildings damaged by flash floods and storms in areas with little or no previous record of such claims," he explained…..

A flooded road near St. Polten, Austria, shot by Alexander Wagner, Wikimedia Commons, under the Creative Commons Attribution ShareAlike 3.0 License

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