TOM EATON | When disasters strike it’s become natural for insurers to up the ante

This, it turns out, is how the world ends. Not with a bang or a whimper, but with an email from your insurance company.

If I’m honest, I feel slightly betrayed. Hollywood assured me that our future crises would be sudden and elemental rather than slow and bureaucratic; that middle-class, urban life would go on more or less as it is now, until the fire and water and tornadoes arrived and we all jumped in our cars to form the great honking traffic jam that happens in the middle of the first act.

Now, it seems almost certain that what will hammer the planet’s billion middle-income inhabitants first will be a flood of bills and a firestorm of cascading costs as their insurance company raises their premiums out of reach before finally sending the aforementioned email, explaining that Mother Nature is refusing to honour long-standing contractual agreements, so it’s time to call it quits.

Perhaps this surprise is my fault, since, like many, I haven’t given a great deal of thought to insurance. I’ve certainly never associated it with societal collapse. My only experiences of it have been brief and almost always pleasant, even that time when I had all four wheels stolen off my car and the call centre operator calmly reassured me that all I had to do to get sorted out was drive my wheel-less car down to any accredited fitment centre.

Perhaps if I’d been taught anything about money at school I might have seen this coming. But like most humans I was taught almost nothing about money at school, which I suppose is why there are millions of Sex In The City fans who believe that newspaper columnists can live in New York penthouses.

Suffice it to say, all I knew about insurance was that it was generally a good thing and was likely to remain so.

Last week it was reported that just over a quarter of homes in the US are “vulnerable to insurance correction” — a euphemistic description of what has started happening in California, as some homeowners see their premiums surge by up to 80%. Others are simply being told that their properties are now uninsurable due to the risk of fire. In Florida, insurers are hastily retreating before an advancing ocean: according to the Washington Post, the cost of insurance in Miami is more than double the national average, and yet local insurance companies “haven’t turned a profit since 2016”.

In South Africa, natural disasters hit the poor first and hardest, and leave far deeper and longer-lasting injuries than they do to the insured middle class. Perhaps this is why we tend not to talk about what climate change means for the suburbs and coastal retirement villages.

To be clear, these are not figures added to the pile by depressed climate scientists, or angry slogans chanted by the ideological opponents of late state capitalism. These are mathematical facts, produced by steely-eyed bean counters lodged deep inside the machine, greasing the wheels of acquisition, consumption and shareholder value. This is capitalism, red in tooth and claw, looking at the numbers and saying straight out that fires, floods, storms and droughts are becoming so common and so bad that the fundamental business model of insurance — and therefore of home ownership — will soon no longer work in various parts of the world.

In South Africa, natural disasters hit the poor first and hardest, and leave far deeper and longer-lasting injuries than they do to the insured middle class. Perhaps this is why we tend not to talk about what climate change means for the suburbs and coastal retirement villages: it feels callous to fret about the wealth of people who have houses — and in some cases more than one house — when there are South Africans living in plastic shelters on flood plains.

And yet, as the Overberg mops up after the astonishing rain of Sunday and Monday — a deluge unmatched since at least 2014 — and the Garden Route looks at entire beaches ripped away by the storm surge last weekend, and residents of Durban remember the catastrophic flood of last April, I wonder what sums are being done by South Africa’s actuaries, and which futures are rapidly coming into focus.

Again, I understand if these figures seem too distant or too small to be of any concern to us now. If once-in-a-generation floods become twice-in-a-generation floods, is that necessarily a call to move to higher ground? And yes, last weekend’s storm surge was extraordinary, but the sea is rising very slowly. In the US’s Pacific Northwest it’s even falling, as that corner of North America shrugs off the last of the Ice Age glaciers and stretches its legs for the first time in 10,000 years. The more cautiously pessimistic scenarios for our coast suggest that the sea will rise more or less one metre by the end of this century. It’s hardly a tsunami.

And yet, for every metre the sea rises up a gently sloping coast, it advances or digs away or destabilises up to 10 inland; perhaps a fitting metaphor for what climate change might do to economic assumptions that right now seem immutable, as small changes make big waves.

After all, if a property on a river bank, or in an estuary, or perched on a low bluff above dunes is going to be uninsurable and therefore unsellable 60 years from now, surely logic dictates that it must be unbuyable 30 years before that? And if a property is unbuyable 30 years hence, how much can it be worth today?

Yes, the bean counters know: you can be warm and dry, and still be underwater.