Insurance Co. Class Action In Illinois May Spur Wave Of Climate-Change Suits

| by Sarah Fruchtnicht

Farmers Insurance Group filed nine class action lawsuits against nearly 200 communities in Illinois last month, arguing that they should have been more prepared because climate change predicts more rain and flooding will occur.

The case calls to question whether the increase in natural disasters across the U.S. is foreseeable because of climate change or simply an “act of God.”

A judge could find city governments responsible for not appropriately managing their budgets to include costly emergencies.

In April 2013 the region suffered severe flooding. The federal government paid more than $218 million in aid and low-interest loans, according to the Illinois Emergency Management Agency.

A Farmers spokesman would not specify how much the company paid out in claims, but the class action argues that communities should have fortified their storm drains and sewer systems to accommodate increased rainfall.

If the class action begins a sea change for municipal budgets, climate denialism among politicians, at least on the local level, will have to take a back seat. 

Furthermore the largely conservative industry of property and casualty insurance, which always erred on the side of non-regulatory politics, appears to be turning blue. 

“Insurance is heavily dependent on scientific thought,” Frank Nutter, president of the Reinsurance Association of America, told the New York Times last week. “It is not as amenable to politicized scientific thought.”

Class actions against the Army Corps of Engineers for a neglected and insecure levee system in the New Orleans area during Hurricane Katrina were mostly dismissed on the grounds of immunity.   

"It's a long shot for the insurance companies, but it's not completely implausible, and if you have enough cases like this going forward it might build some helpful precedent," said Robert Verchick, who served on the Obama administration's Climate Change Adaptation Task Force.

"We will see more and more cases," Michael Gerrard, director of the Center for Climate Change Law at Columbia Law School in New York, told Reuters. "No one is expected to plan for the 500-year storm, but if horrible events are happening with increasing frequency, that may shift the duties."  

Sources: Reuters, Christian Science Monitor, New York Times