Insurers keep close eye on extreme weather report
Tony Sherrard searches through debris that used to be his home for family keepsakes March 3, 2012 in Marysville, Ind., after a tornado obliterated through the Midwest. The IPCC is about to release its latest findings regarding extreme weather trends and climate change. The predictions can help insurers figure out what to cover, and for how much.
Stacey Vanek Smith: Later this morning the Intergovernmental Panel on Climate Change will release a new report on extreme weather. Among the groups watching closely: the insurance industry.
Marketplace's Adriene Hill reports.
Adriene Hill: The new report will help suss out the relationship between climate change and extreme weather events -- things like droughts, tornadoes and flooding -- which are big deals if you're an insurer.
Lindene Patton is with insurance company Zurich Financial Services.
Lindene Patton: The effects of climate change can certainly impact our entire portfolio.
I.e., they can cost a lot of money. Scientific predictions can also help insurers figure out what to cover, and for how much.
But the insurance companies aren't the only ones who could feel the pinch of more weather disasters.
Cynthia McHale: This hits all of our pocketbooks.
Cynthia McHale is head of the insurance program at the nonprofit coalition, Ceres.
McHale: Because if private insurance won't cover extreme weather damage to homes and businesses, in fact, taxpayers are on the hook.
Why? Here in the U.S., many insurance programs are backed by federal or state governments, especially in places that private insurance companies don't want to cover the weather risks.
I'm Adriene Hill for Marketplace.