![farmers[1]](https://wattsupwiththat.files.wordpress.com/2014/06/farmers1.jpg?quality=83)
From the Insurance Journal:
Insurer mysteriously withdraws high-profile lawsuit for climate damages in Chicago flooding case
Farmers Insurance Co. has withdrawn its lawsuit against Chicago for climate-related flooding, marking an abrupt end to a novel legal claim that had tantalized observers with its prospects for pushing cities to act against climate change.
The company filed for dismissal Tuesday after its case against dozens of municipalities in the Chicago area gained national media attention and no short amount of criticism from local officials, who warned that taxpayers would shoulder the cost of the class-action suit.
A spokesman for Farmers said in a statement that the company reversed course after the lawsuit successfully caught the attention of municipalities, which the company had accused of mismanaging their stormwater systems. The lawsuit claimed that 600 homes were damaged during a downpour in April 2013 after local officials allegedly failed to drain underground storm tunnels and deploy protective barriers. It also said the officials failed to account for heavier rainfall from global warming.
Source: http://www.eenews.net/stories/1060000761
Hmmm, they filed a lawsuit to elevate awareness? I’m not buying it.
Chances are some corporate weasel halfwit came to his/her senses and realized three things:
1) They can’t absolutely link severe weather events leading to flooding and climate change, so their lawsuit was unwinnable. See the data below.
Floods have not increased in the US in frequency or intensity since at least 1950.
Percent of US streamguages above “bankfull streamflow” defined as the highest daily mean streamflow value expected to occur, on average, once in every 2.3 years. Source: USGS
Flood losses as a percentage of US GDP have dropped by about 75% since 1940.
Annual flood losses have decreased from about 0.2% of US GDP to <0.05% since 1940. Flood loss data from NOAA Hydrologic Information Center.
h/t to Dr. Roger Pielke Jr. for those graphs.
2) The bad press they were getting probably was projected to cost more than they could recover.
3) The reason insurance is purchased at all is to CYA in unforseen circumstances, including “acts of God”. For Farmers Insurance Group to put the onus of being prepared for all such contingencies is counter-intuitive for the need to purchase insurance at all.
The lesson from Farmers was “Why buy insurance from us at all? If you do and you don’t meet our retroactively applied arbitrary and unscientific risk standards, we’ll just sue you to get the money back”.
Idiots.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
From Jeff Alberts on June 8, 2014 at 8:22 am:
As my father did fade into shutdown with dementia, and it became clear keeping the body alive per the desires of the state and the nursing home long after the physical mind he had before was irrevocably destroyed was the singular greatest cruelty I have ever witnessed committed against man or beast, carried out with an institutionalized “compassion” as would Josef Mengele’s staff as they researched how far the organs can degrade before life is irreversibly unsustainable, I have considerably “liberalized” my view on “murdering” the elderly over time.
We can put down terminally ill animals. They are dumb creatures who can’t understand why they are in pain. It is a kindness. My father became a dumb creature who couldn’t understand why he was in pain.
For the other, my country has nuclear weapons, armed drones, and curious Supreme Court decisions. That could be a very long wide-ranging discussion.
Oh well, however it happens, someday I too will be done wearing the flesh. It is inevitable, I do not fear it. Someday you’ll be done too. Then either you will know you were wrong, or I won’t know that I was wrong.
Either way, I win.
Farmers of Salem years back refused to write me an additional policy on a new purchase. The reason given was Farmers expected greatly increased hurricane damage due to global warming and declined to write policies for properties near the coast. Note: the property in question is 100 ft above sea level.
The policy was reversed some years later when their predictions proved very wrong. They took a hit from the lack of underwriting.
Insurance companies are expected to assess risk, and command a premium that will cover that risk. Suing anyone else because they didn’t do their job had to fail. If they determine the risk istoo high, as Hell_Is_Like_Newark states, the insurance is not offered at all. If they claim that they relied wholly on Government data, and were misled, all one needs to do is make sure that information is widely broadcast on news media, and their stock (and customer count) will plummet as people realize they’re not doing their job, and all could be left high and dry. There was no way Farmers would have gone all the way to court on this.
This was simply a publicity stunt.
Don’t insurance companies have ability to increase rates in an area?
That will get people’s attention, perhaps even the scummy dynasty of Chicago mayors.
It is a challenge to evaluate risk, perhaps there are or could be evaluating agencies. Certainly there are consulting engineering companies who could advise municipalities on the state of their infrastructure and maintenance practices. Today the are non-destructive test methods to inspect pipes, for example. (On my street they replaced fifteen feet of century old wooden stave sewer pipe as a result of inspection (video camera on long cable), the rest was considered OK. They also mapped exactly where each house connection to the sewer pipe was (maps old and new aren’t always accurate, for various reasons including contractor shortcuts and recording errors).
(Yes, it sounds as though Farmers were trying to get higher premiums retroactively, in one sense.)
Farmers insurance relies heavily on an individual’s credit when determining premiums. They use credit to predict losses with certainty using quasi-science for justification in raising the rates on low income families by as much as 150%. How is it their magical credit scoring system failed to see the effects of climate change and the rain which caused the flooding? Sad underwriting techniques produce higher losses than desired with no one to blame but themselves.
Thanks to faboutlaws for an informed comment. Farmers did something very stupid and then decided to wise up.
I don’t know if anyone else mentioned it, BUT . . . . most US states (cities, counties) have maximum limits IF . . . . you can even get “permission” to sue the “sovereign” (the government).