Today I saw an article entitled “Souring insurance prices illustrate the cost of climate change”. Out of principle I did not chose the read the article. Which is not normally something that I would do. Even articles that I don’t always agree with I will try to read so I at least have an idea of what the authors point of view is. But in this case I didn’t. I didn’t because the simple fact that one would equate climate change to insurance costs seems to be missing the point. I will explain here, in brief, why that is that case.
At its root, the idea that climate change is increasing prices is undoubtedly true. Insurance companies will do whatever is needed to recoup what they deem as losses. But therein is the point. It is not so much that it is the fault of climate change that prices are going up. Rather, it is the ever existent drive companies to make money that is driving up costs. One should not be surprised by this.
Major corporations have, due to years of legal maneuvering, a legal obligation to pay their stock holders. Again, at face value, this is a good thing. Corporations cannot run up stock prices, makes a bunch of money, and then sell out or close. What it also means is that these same companies use this obligation to justify all manner of gouging of pricing to the American people in the name of fulfilling their legal obligation to shareholders. They give ample justification under the auspices of ‘ensure investors are paid’, while at the same time making their CEO’s and board members millions. This is exactly what insurance companies are doing now.
Be it in California where wild fires are damaging whole communities, or along rivers and the coast where floods are destroying the homes of those that have little options, all largely due to climate change, insurance companies are using these tragedies to justify increasing their prices. They claim in doing so that they are covering costs. Yet, isn’t that exactly why people pay insurance in the first place?
What is the point of paying into insurance if not to be covered in the instance of unforeseen events? What are the insurance companies doing with all the money that people pay them such that the company is worried about ‘cost’? Why would it be necessary for these same company to raise prices in the face of climate change, while they continue show record profits?
The answer to all these questions is rather simple. The answer to the title of the article is also rather simple: Capitalism. The always answer as to why a company would act to harm the general population. Capitalism. The legal greed of modern America. Capitalism. The major root of all society harm in the United States today. Capitalism.
Rocky Mountain Musing 