Insurance as catastrophe: A geography of house and contents insurance in bushfire-prone places

Int J Disaster Risk Sci

et al. 2019

Self Cite

Australian households are increasingly vulnerable to natural hazard-related disasters. To manage disaster risk, government commissioned inquiries have called for greater investment in mitigation. This article critically examines the call for a shift in funding priority towards pre-disaster mitigation measures, in the context of growing concerns around the ability of households to access and afford insurance. It examines mitigation measures in the context of three prominent Australian disasters: the Black Saturday bushfires (Victoria, 2009), the Queensland floods (2010-2011), and Cyclone Yasi (Queensland, 2011). We argue that as a mode of disaster security, mitigation operates as a complex assemblage of logics and practices of protection, preparedness, and resilience, which problematizes simplistic protection/resilience binaries. On the one hand, mitigation serves as a mode of protection, which underscores the dominant maladaptive rationality of insurance. It promises a collective solution to uninsurability that is limited by government fiscal constraints and growing employment of risk-reflective insurance pricing. On the other hand, there is evidence of an emergent rationality of household insurance as a path to resilience and preparedness-for example, in the development of insurance systems that price household retrofitting technologies and in the development of policyholder education campaigns. This resilience rationality holds the promise of securing individuals previously excluded from insurance. However, for householders lacking the necessary physical, cognitive, and financial capacities to make themselves and their properties resilient, the transition to a pre-disaster mitigation mode of security will likely do little to alleviate disadvantage and marginalization.

Section: Insuring Disaster Relief and Recoverymentioning

confidence: 99%

An Unmitigated Disaster: Shifting from Response and Recovery to Mitigation for an Insurable Future

Vet

Eriksen

Int J Disaster Risk Sci

et al. 2019

Self Cite

“…Fairness, solidarity, equitability, and protection of the vulnerable have been identified as fundamental to the social legitimacy of adaptation policy and action (Adger, 2016). Booth and Harwood (2016) found that for insured people living in an area of high wildfire risk, while the threat of fire was ever-present, the calculative logics of insurance technologies were distant and opaque. In contrast, the value of household belongings was emotionally constituted, and hence not everything within the home was deemed worthy of insuring.…”

Section: Responsibility For Climate Adaptationmentioning

confidence: 99%

Privatizing climate adaptation: How insurance weakens solidaristic and collective disaster recovery

Lucas

2020

WIREs Climate Change

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.

“…These households may have fewer assets because of frequent moves (note lease length above) and/or devalue their possessions when compared to housing assets. Booth and Harwood (2016), for example, observe a sense of irreplaceability borne of personal possessions that are hand-me-downs, second hand or home-made. While insurers may define these as insurable, some households deem these uninsurable, that is, they cannot be replaced because of their sentimental and emotional value or are deemed unworthy of financial investment in insurance to ensure their replacement.…”

Section: Underinsurance As Adaptationmentioning

confidence: 99%

Underinsurance as adaptation: Household agency in places of marketisation and financialisation

Kendal

2019

Environ Plan A

Self Cite

The underinsurance of property is pervasively and persuasively promoted as an indicator of risk and riskiness and, in Western nations, is assumed to be aligned with socio-economic disadvantage. Yet, the solution – in its most simple form, buying more insurance – lacks critical interrogation of what the problem actually is. To understand underinsurance better, we map house and contents underinsurance across two municipalities in Australia’s island state of Tasmania, and observe that the existing delineation of disadvantage and advantage between these two places is muted in relation to insurance – underinsurance does not straightforwardly map onto disadvantage. We provide an alternative explanation: that underinsurance is not a risk for households per se and does not represent riskiness on behalf of these households. Rather, it is indicative of household agency that produces place-specified responses within the processes of financialisation and marketisation. We observe that the growth in renting, driven in part by housing financialisation, is associated with property underinsurance. The history of renting as temporary and marginal informs renter decision making not to insure, and thus current financialised changes in housing co-produce rather than ameliorate underinsurance. We also conclude that in negating or resisting insurance marketisation, households garner everyday financial and material adaptative capacity by underinsuring.