In the Fine Print: What Insurance Companies Know About Fracking and Climate Change

Steven Conn July 26, 2017

The oth­er day, I got one of those thick envelopes from my insur­ance com­pa­ny stuffed with many pages of very small print. Impor­tant infor­ma­tion about your pol­i­cy” said the enve­lope, and usu­al­ly those go straight into the recy­cling bin.

But for what­ev­er rea­son I opened this one and read it. Turned out to be pret­ty inter­est­ing. Most­ly, it detailed all the things my homeowner’s insur­ance will no longer cov­er. For exam­ple, my house is not cov­ered by dam­age done by any of the ani­mals that live in the Mia­mi Val­ley. If, how­ev­er, my liv­ing room is trashed by a rhi­no, then I’m good. Also, if my house blows up because I’m run­ning a crys­tal-meth lab in the base­ment, that isn’t cov­ered either. Fair enough.

Then I read this: dam­age result­ing from earth move­ment” has been exclud­ed from my pol­i­cy and earth move­ment includes move­ment result­ing from nat­ur­al resource extrac­tion activ­i­ties, exca­va­tion, or pres­sure by sur­face or sub­sur­face earth or fill.”

Trans­la­tion: My insur­ance doesn’t cov­er dam­age from fracking.

But wait! Haven’t we all been assured by the indus­try that frack­ing is envi­ron­men­tal­ly harm­less and pure as the dri­ven snow? Haven’t they denied that inject­ing flu­ids of unre­vealed tox­i­c­i­ty at high pres­sure into the ground caus­es earth­quakes, er, earth movements?”

Yes, they have. And it is also true that the frack­ing industry’s hand­maid­ens in Colum­bus, Ohio (and else­where) have pro­tect­ed them from much reg­u­la­tion by cit­ing these same reas­sur­ances. But appar­ent­ly the insur­ance com­pa­nies didn’t get the memo. Insur­ance com­pa­nies cal­cu­late risk, and they stay in busi­ness because they’re good at it. They aren’t much inter­est­ed in alter­na­tive facts” in the face of real sci­en­tif­ic evidence.

And you know what else insur­ance com­pa­nies are pay­ing atten­tion to? Cli­mate change. But wait! Didn’t we recent­ly elect a man who thinks cli­mate change is a Chi­nese con­spir­a­cy”? Isn’t Con­gress con­trolled by a par­ty that denies that cli­mate change is a problem? 

Yes, and yes. But insur­ance com­pa­nies didn’t get that memo either. Instead, insur­ance com­pa­nies are track­ing cli­mate data like hawks, because the costs of clean­ing up after weath­er-relat­ed dis­as­ters asso­ci­at­ed with the warm­ing plan­et are ris­ing fast and furi­ous. As a result, more and more insur­ers fig­ure in cli­mate change when set­ting rates and pre­mi­ums and decid­ing what they will cov­er and what they won’t. Frank Nut­ter of the Rein­sur­ance Asso­ci­a­tion of Amer­i­ca stat­ed the prob­lem blunt­ly: It is clear that glob­al warm­ing could bank­rupt the industry.”

Insur­ance com­pa­nies aren’t alone in plan­ning for the con­se­quences of cli­mate change. In 2015, the Depart­ment of Defense released a big report on the secu­ri­ty impli­ca­tions of a warm­ing plan­et. The Pen­ta­gon con­clud­ed that the effects of cli­mate change pose a real secu­ri­ty risk” for the Unit­ed States because they threat­en the sta­bil­i­ty in a num­ber of coun­tries.” This means, accord­ing to Pen­ta­gon offi­cials, that com­bat­ant com­mands are inte­grat­ing cli­mate-relat­ed impacts into their plan­ning cycles.”

So we find our­selves at a curi­ous cross­roads. The seri­ous peo­ple, whether they are wear­ing green eye­shades and crunch­ing data or mil­i­tary uni­forms plan­ning for our nation­al secu­ri­ty, rec­og­nize the here-and-now present dan­gers of cli­mate change. But the right-hand side of the polit­i­cal aisle refus­es to acknowl­edge that there is any prob­lem at all. Don­ald Trump rolls back green­house gas reg­u­la­tions on coal. Mean­while Allianz SE, one of the world’s largest asset man­agers, is divest­ing from coal stocks alto­geth­er because they’ve deter­mined that cli­mate change is bad for business.

So here’s my sug­ges­tion. If you find your house dam­aged by earth move­ments,” or should your crops fail because of cli­mate change, demand some com­pen­sa­tion from your Con­gress­man. Just don’t go cry­ing to your insur­ance com­pa­ny — you’re prob­a­bly not cov­ered for that.

(“Opin­ion: Your Insur­ance Policy’s Fine Print, and Frack­ing” was orig­i­nal­ly pub­lished in the Day­ton Dai­ly News and is repost­ed on Rur­al Amer­i­ca In These Times with per­mis­sion from the author.)

Steven Conn is the W. E. Smith Pro­fes­sor of His­to­ry at Mia­mi Uni­ver­si­ty in Oxford, Ohio. He is the author of Amer­i­cans Against the City: Anti-Urban­ism in the 20th Century.”
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