Insurance and Climate Change: Do Governments Have a Duty to Protect Property Owners? [October 16, 2014] [open pdf - 65KB]
"Federal and private insurers are well aware that if the scientific consensus is correct that climate change will cause more frequent extreme weather events, they may be making substantially increased payments in the future. Commentary on the link between climate change and insurance has become voluminous. One of the many insurance company concerns was recently in the news: whether government can be held liable for not putting in place adequate infrastructure--or maintaining existing infrastructure--to protect against property damage from climate-change-related extreme weather. The headline-garnering event, this past May, was the filing by Illinois insurance companies of nine proposed class actions against almost 200 Illinois municipalities. The suits alleged the municipalities' failure to improve the capacity of their storm water sewer systems and provide adequate barriers such as levees, in the face of knowledge that climate change had resulted in greater rainfall volume, intensity, and duration in Illinois than in the pre-1970 period. The particular event triggering the suits was an unusually heavy rainfall in April, 2013, alleged by the insurance companies to be reasonably foreseeable and thus not an 'act of God' (for which government would have an absolute defense). As a result of the storm water systems' inability to handle the runoff, widespread property damage occurred through sewer water intrusion."
CRS Legal Sidebar, October 16, 2014