BCDC’s “Financing the Future Working Group” Takes a Closer Look at Insurance Solutions to Sea Level Rise


On July 20, the Bay Conservation and Development Commission (BCDC) held its most recent Financing the Future Working Group meeting. The working group is one of several committees formed to address issues pertaining to sea level rise in the Bay Area. Presenters at the meeting featured representatives from Bay Planning Coalition member Marsh Risk & Insurance Services, who discussed the financial and environmental risks facing the Bay Area as a result of climate change and sea level rise and to what extent those risks are insurable.

Not only does sea level rise leave coastal infrastructure and property vulnerable, but it poses some major environmental risks as well. How large of an impact will flooding have when it hits sites containing hazardous materials (e.g., former landfills and wastewater treatment facilities)? How costly will clean-up, damage and other associated costs be, and how will it be paid for?

The Marsh representatives went into some depth as to the extent that insurance might act as a potential financial solution. They highlighted some gray areas, including that for risks to be insurable, they have to be uncertain and unexpected. Insurance companies don’t necessarily want to get involved with risks that are commonplace, and thus may not offer protection specifically against impacts of sea level rise since at a certain point, weather events such as flooding can become more predictable. However, property owners will not necessarily be out of luck, as property and pollution insurance already exist as financial protection against contamination, physical damage, and business disruption. The Marsh reps also pointed to existing government subsidized insurance programs, such as the National Flood Insurance Program, as something we may see more of in the future.

Though some uncertainty remains as to how much insurance against the impacts of sea level rise will come from private versus public sources in the future, it is certainly a relief that insurance companies are preparing for and have recognized the realities of the changing climate.

Presentation slides, draft minutes, and other materials from the meeting will be available shortly on BCDC’s website: http://www.bcdc.ca.gov/fwg/meetings.html

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