Fears abound that climate change will effect more than our environment. The first thing to be hit by pollution will be our pockets as reports suggest that climate change is a threat to home insurance prices. The value of claims due to extreme weather conditions might triple say the Association of British Insurers. The BBC reported that: “The number of winter storms in the UK has doubled over the past 50 years and the 1990s were the warmest decade since records began.” In the year 2000 floods damaged 10,000 properties and the resulting claims made by homeowners totalled almost £1bn.

In an interview with the BBC, John Parker, who’s the head of general insurance at the Association of British Insurers, said: "Managing the impact of climate change is a major challenge for society - we already live with its effects every day. Insurance is in the front line of climate change. Managing risk is central to our industry, and insurers must be equipped to analyse the new risks arising from climate change, and to help customers protect against them. The report provides the industry with a platform to ensure that appropriate action is taken by insurers, government and other stakeholders to effectively manage climate change.”

Annual spending on flood defences has been increased from £300m to £400m since 1997 and the government says that it is dedicated to reducing carbon dioxide emissions by 20% below 1990 levels by 2010.

In a document which was released by the Environmental Defence Fund (EDF) which is a leading American not-for-profit organisation that seeks practical solutions to a broad range of human-health and environmental issues it was revealed that: “The accumulation of anthropogenic greenhouse gases in the atmosphere, principally carbon dioxide but also methane and nitrous oxide, is expected to cause substantial warming of the Earth.”

And that: “Many ecological consequences will ensue, among the most direct of which will be the melting of small glaciers and ice caps on land and the expansion of seawater as it warms. Both these effect will cause global sea level to rise.”

As sea levels rise, river levels will too and this means that if there is a prolonged period of rain, rivers in the UK will flood as they did in 2004 wreaking havoc and damaging homes and the lives of those who own them. The ABI agree that in the long term climate change will increase rainfall, chances of storm weather and also raise sea levels.  The answer to the problem as far as rising insurance costs are concerned which the Association of British Insurers suggests is to make those who don’t live in areas with which flood pay for some of the financial burden.

The following is an excerpt from the ABI website: “By spreading risk across policy-holders, insurance enables householders and businesses to minimise the financial cost of damage from flooding... This enables insurance to be offered at very competitive prices to customers living in low flood risk areas.”

The UK is unique in offering flood cover as a standard feature of household insurance policies.  Unlike much of Europe and the rest of the world, flood cover is widely available to the UK’s 23.5 million householders, regardless of the type of land they live on.