That's a trick question -- they already are. As Victoria Schlesigner and Meredith Knight reported in a just-posted expose for Scientific American -- Insurers Claim Global Warming Makes Some Regions Too Hot to Handle -- insurers are dumping coverage of those who may be in the path of global-warming-supercharged storms and rising sea levels.
While the climate change angle of this story is relatively new -- insurers will not yet disclose to what degree climate change factors into their calculations when they're deciding to increase prices or in some cases dump coverage of entire areas -- what's not new is the accelerating pace of coastal development that has put so much property in harm's way. When big storms like Katrina and Rita come, it's a one-two punch, and the insurers, who are after all for-profit entities, were shaken by the huge losses racked up by these disasters.
Since 1968, the federal government has stepped in to cover individuals who could not get coverage otherwise.
Since its inception, NFIP, which has typically run at a loss, has become the country's primary provider of flood insurance. For instance, in 2005 and 2006 NFIP requested and was granted a $24 billion in loans from the U.S. treasury to reimburse Gulf Coast customers for losses caused by Hurricane Katrina. [Evan] Mills [an environmental and energy systems scientist at Lawrence Berkeley National Laboratory] says that it is unlikely NFIP will ever be able to pay back the loan, given that it pulls in an average of only about $2 billion a year in premiums from consumers.
While some researchers have already completed analyses of the current and ultimate cost of global climate change--Sir Nicholas Stern, former chief economist at the World Bank commissioned a report that puts the figure at $9 trillion -- others have countered with what they believe will be the even more enormous cost of changing our ways in order to avert these harms: Lombard Street Research, a for-profit macroeconomic research think tank that advises businesses has put the figure as high as $18 trillion.
No matter what we do, it's clear that climate change could be a significant drag on the world economy for centuries to come -- not to mention the indirect effects like climate change-caused wars: current,projected and historical.
The views expressed are those of the author(s) and are not necessarily those of Scientific American.