How climate change is contributing to the flood protection gap?
Man made climate change might be the biggest existential threat to mankind at present. Wildfires, mudslides, droughts and floods are ripping apart whole countries, costing millions in reparations. Based on the annual report from NOAA’s Global Monitoring Lab, global average atmospheric carbon dioxide was 417.06 parts per million in 2022, setting a new record high.
It’s easy to think climate change doesn’t affect us, hidden away from the calamities of the world on our Great little island. However, this is far from the truth.
How is climate change affecting flooding in the UK?
Research from the University of Bristol is shows that as the atmosphere warms, it is able to hold more moisture. The current understood ration is 7% more moisture for every Celsius degree of warming. On this basis, the intensity of downpours could increase by 5-15%, with the increase significantly affecting the UK’s Northwest.
The tendency for UK located downpours will not only increase, but the variability will too. Extreme rainfall events seem to cluster, with record-breaking events spiralling, followed by a period of no records broken. This in turn poses challenges for communities trying to adapt – clustering events risks infrastructure being unprepared, and increased long-term damage.
The research highlights the importance of meeting carbon emissions targets and also planning for increasingly prevalent extreme rainfall events, which look highly likely. Just as the amount of CO2 in our atmosphere has increased, UK economic losses and insured losses have also been on an upwards trajectory.
What is the flood protection gap?
Around 80% of the world’s catastrophic flood losses are uninsured. This leaves people, businesses, and governments around the world exposed to bills that can ruin lives. And the problem is getting worse.
In 2022, economic losses reached an estimated 313 billion dollars – 4% above the 21st Century average. Insured losses reached 132 billion dollars – 57% above the 21st Century average. These insured losses accounted for 42% of the total losses. Flooding is a hugely significant and costly risk for businesses worldwide, and yet there is a large 58% “gap” in protection between damage costs and insurance payouts.
What affects the flood protection gap?
Insurers are increasingly reluctant to offer flood protection in at-risk areas. And yet, because of climate change and recent weather events, flood risk is rising, and more areas are being deemed ‘at-risk’.
What determines at-risk areas include
- Hazard – the intensity and frequency of events, as well as the depth of flood waters and the amount of rainfall.
- Exposure – how many people and properties are within the hazard area. Proximity to rivers and coasts will have higher exposure.
- Vulnerability – the susceptibility of people and property to the damage. This will measure resilience measures and in place regulations.
As man-made climate change impacts the intensity, frequency, and patterns of flooding, more people, who are often more vulnerable. Due to rising costs, insurers will impose greater excesses or raise premiums; furthermore, insurers often have no choice but to decline properties in high-risk areas. In this way, insurers remain able to operate, but ultimately more and more businesses are unable to acquire suitable flood cover.
The benefits of a flood insurance broker and FloodFlash?
Flood insurance covers the financial risk of a flood. However, this does not directly reduce vulnerability, and the more the risk increases and the climate worsens, the more uncertainty grows. Uncertainty causes traditional insurers to refuse cover, but FloodFlash provides the certainty.
FloodFlash clients choose a trigger depth and payout that they would need in the event of a flood, reducing the uncertainty at claim.
This flood insurance technique doesn’t require loss adjustors – your claim is already settled as soon as the sensor shows the water has hit your trigger depth.
The speed of a FloodFlash payout is a great benefits for businesses. They often pay out within days; their fastest claim was 3 hours and 50 minutes, from the flood happening to payout money in the account.
How does Floodflash measure flood damage?
Upon contacting us, Club Insure, that you require flood insurance, we will walk you through the process of receiving a personalised quote. This quoted is based on FloodFlash’s depth to settlement ratio, allowing us to adjust the agreed trigger depth and settlement figures to make the policy suit your needs. We may advise multiple triggers to cover multiple flooding scenarios. Once the policy has been agreed, trained engineers will arrive to install a sensor at your premises within 14 days.
The sensor measures whether water levels at your property have reached the agreed trigger depth. This tells FloodFlash, who will send the agree settlement in-full. The money can then be used by the property owner in any way they’d like to fix the issue, whether it’s for buying stock, business interruption or repairing damage.
Get Flood insurance with Club Insure
Contact Club Insure today and see how our bespoke flood insurance can apply to your business