John’s Blog/Newsletter: SEA LEVEL RISE NOW

Yesterday’s feature in the Insurance Journal headlined that Florida flood insurance rates need to increase by 379% due to rising sea level (source: First Street Foundation)

Of course, a four fold increase in insurance costs would be catastrophic in the short term.  What will you do when the insurance guy sends you the new bill?

In the long term, as flooding increases and gets more severe, flood insurance may simply be TOO expensive for most home owners, or there simply may be no insurance offered at all.

It’s important to understand why flood insurance largely ignores the new challenge of rising sea level, and how it could affect anyone close to tidal areas.

Flood insurance is only issued for one year at a time. An insurer looks at the risk of flooding during the annual policy. (For business planning purposes, they may project our 3-5 years, but no more, since the risk markets are so dynamic.)

It helps to understand that flooding is a misleading term implying that it’s all of a similar nature. I separate flooding into five types:

1. Coastal storms, like hurricanes with severe waves and storm surge.
2. Extreme rainfall events (interspersed with heat and drought).
3. Downhill and downstream runoff, which comes from the extreme rainfall, but as it goes downwards, the water depth multiplies.
4. Extreme high tides, often called “king tides” following cycles of the moon and sun.
5. Sea level rise – hard to see directly, but cumulative, like the drip filling a bucket – resulting from the melting ice sheets and thermal expansion of seawater.

Coastal erosion is sometimes confused with flooding, and it often happens during flooding events, but is a very different issue.

During the twelve months of a flood insurance policy, the present-day risk of global sea level rising one inch is almost zero. The risk of flooding comes from the amounts and combination of the first four flood forces.

The problem is that sea level rise is increasing, and the rate of increase is accelerating. For the last three decades the rate has almost doubled each decade as shown on this simplified graph.

If that doubling trend continues, before the end of this century, global sea level could be rising at more than a foot a decade. That’s hard to imagine. But geologic history shows that rates can increase quickly. Eleven thousand years ago, sea level was rising faster than a foot a decade for four centuries.

Hard as it is to imagine, it will likely happen again.

As we have all seen in the last year with changing projections for pandemic deaths, changing trajectories and exponential growth can yield big surprises very quickly.

The point is that it’s commonly assumed that flood insurance premiums cover flood risk, that the cost is a “marker” or proxy for the risk.  The article quoted at the top suggests that rates should increase almost four times. But that only gets us to mid century.

In the next decade or two it will become clear that the world is changing profoundly. The rate of ice melt is accelerating. The rate of sea level rise is accelerating. Shorelines will move inland. Current efforts to “cling on” to present places will prove futile and expensive.

In my new book, coming out the first week of April, I explain how insurance and public policy may actually be increasing our risk, by reducing our perceived level of risk. The world needs to face the new future smartly.

Rising sea level will be a huge challenge, quite literally unimaginable. For the path forward, we have to start with knowledge and understanding. From that can come better policies. With that, we can start the necessary adaptation…our move to higher ground. We have decades to adapt, but no time to waste.

Thank You, Climate Ambassadors, (and still looking for a few more…)