Major insurance companies appear to be looking into a new tactic to recover money from paid claims. Such companies may start suing cities and states that they contend are not taking enough action to curb climate change.
Last May, Farmers Insurance Group filed a class action lawsuit against Chicago and some 200 suburban municipalities seeking damages. It claims that the cities and villages didn’t take enough action to prevent flooding that Farmers claimed was a result of global warming.
The Chicago area has had problems with flooding for decades. In fact, its Deep Tunnel project was started in 1972 in part because of constant flooding, and that was long before anyone worried about global warming. So flooding in Chicago is nothing new, and as the city and suburbs have grown, the issue has only grown with them. But after last year’s serious flooding, Farmers filed its lawsuit, asserting that the governments didn’t do enough to prevent the disaster.
In May, Reuters reported that this may be the new frontier for insurance companies tired of paying out claims.
“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 the wire service. “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.”
This month, though, Farmers backed away from the lawsuit it filed against those governmental bodies in Illinois, saying that the suit had served its purpose as a warning against the communities.
“We hoped that by filing this lawsuit we would encourage cities and counties to take preventative steps to reduce the risk of harm in the future,” Farmers spokesman Trent Frager said in a statement on June 3. With that message delivered by the lawsuit, Farmers said it would work with the communities “to build stronger, safer communities.”
Such a lawsuit, however, could open a can of worms, and if successful, nearly everyone who builds a building or owns a home could be a target for a global warming lawsuit.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at email@example.com.