Privatizing climate adaptation: How insurance weakens solidaristic and collective disaster recovery. (11th August 2020)

• Record Type: Journal Article
• Authors: Lucas, Chloe H.; Booth, Kate I.
• Is Part Of: Wiley interdisciplinary reviews. Volume 11:Number 6(2020)
• Page Start: n/a
• Page End: n/a
• Publication Date: 2020-08-11
• Subjects: adaptation -- climate change -- disaster -- extreme weather -- insurance -- social legitimacy; Climatic changes -- Periodicals; Climatic changes; Periodicals; 363.7387405
• DOI: 10.1002/wcc.676
• Languages: English
• ISSNs: 1757-7780

Abstract

Abstract: As losses from extreme weather events grow, many governments are looking to privatize the financing and incentivization of climate adaptation through insurance markets. In a pure market approach to insurance for extreme weather events, individuals become responsible for ensuring they are adequately covered for risks to their own properties, and governments no longer contribute funds to post‐disaster recovery. Theoretically, insurance premiums signal the level of risk faced by each household, and incentivize homeowners to invest in adaptive action, such as retrofitting, or drainage work, to reduce premiums. Where risk is considered too high by insurance markets, housing is devalued, in theory leading to retreat from risky areas. In this review article, we evaluate the suitability of private insurance as a mechanism for climate adaptation at a household and community level. We find a mismatch between social understandings of responsibility for climate risks, and the technocratic, market‐based home insurance products offered by private insurance markets. We suggest that by constructing increasingly individualized, technical, and calculative evaluations of risk, market‐based models of insurance for extreme weather events erode the solidaristic and collective discourses and practices that support adaptive behavior. This article is categorized under: Vulnerability and Adaptation to Climate Change > Institutions for Adaptation Abstract : Home insurance premiums based on individual risk are meant to incentivize adaptation, but can undermine collective efforts to adapt to climate change.