tag:theconversation.com,2011:/us/topics/insurance-1182/articles
Insurance – The Conversation
2024-03-08T05:51:37Z
tag:theconversation.com,2011:article/224632
2024-03-08T05:51:37Z
2024-03-08T05:51:37Z
Insurance is the latest weapon financial abusers use against their partners. Here’s how we fix it
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<p>They knew we had separated. Why did they let him cancel the policy and refund him the money without giving me a call to let me know the house and contents were no longer insured, or not do it before speaking to me first?</p>
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<p>These are the words of Maddy (not her real name). Her experience of domestic and family violence was compounded by the acts of the insurance company she thought would give her financial protection.</p>
<p>Maddy’s former partner cancelled their home and contents insurance with a simple phone call. He received a refund of the premiums she had paid just a few months earlier. She didn’t know – not until well after he threatened to burn down the house with Maddy and the children in it. </p>
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<p>If he had followed through with his threat I would have been punished too and made to pay the mortgage for a house that we couldn’t live in and not be able to rebuild because insurance wouldn’t cover it.</p>
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<p>Maddy is one of the women who described how insurance is being misused as a weapon of financial abuse, for my second <a href="https://cwes.org.au/wp-content/uploads/2024/03/CWES_DTD-GI_Issue2_FINAL_Singles.pdf">Designed to Disrupt report</a>. Their personal accounts highlight the need for systemic change.</p>
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Read more:
<a href="https://theconversation.com/banks-put-family-violence-perpetrators-on-notice-stop-using-accounts-to-commit-abuse-or-risk-being-debanked-208575">Banks put family violence perpetrators on notice. Stop using accounts to commit abuse or risk being 'debanked'</a>
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<h2>Insurance as a weapon</h2>
<p>General insurance is designed to provide financial protection from unexpected events. It’s supposed to be an affordable way to repair or replace an asset that is lost, stolen, damaged or destroyed. </p>
<p>But too often, victim-survivors of domestic and family violence find they don’t have the coverage they thought. They may be left without a car, or a home, and with no or limited means to pay to restore their financial safety and economic security.</p>
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<a href="https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man pointing out terms in some paperwork to a woman" src="https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/580043/original/file-20240306-20-aplow4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Domestic violence victim-survivors can find they have less insurance coverage than they thought, or none at all.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/real-estate-agent-closes-deal-client-2256175877">Shutterstock</a></span>
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<p>There is limited data about the extent of the problem. But through desktop research and consultation with those with who’ve experienced it, and with consumer advocates and industry, we found the biggest issue is with joint policies. </p>
<p>Financial abusers exploit general insurance policies and procedures to deny access to information, cancel policies, interfere with the claims process, and to steal, limit or withhold payouts to the victim-survivor. </p>
<p>They aim to exert control by leaving their partner with no money, damaged or irreparable property and assets, and the accompanying emotional toll. </p>
<h2>Differing policies and procedures</h2>
<p>While some insurers have specialist teams to deal with these sorts of cases, there is a lack of standardised practices across the industry. </p>
<p>Results of our survey reveal wild variations in data between companies, with the number of domestic violence and financial abuse cases reported ranging from 11 to more than 2,000 in the 2021–22 financial year.</p>
<p>This means some victim-survivors will receive support that is empathetic and understands the affects of trauma, with flexibility for individual solutions. Others continue to struggle with dismissive or judgemental staff, risks to their safety, or compounding financial hardship. </p>
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Read more:
<a href="https://theconversation.com/higher-unemployment-and-less-income-how-domestic-violence-costs-women-financially-204688">Higher unemployment and less income: how domestic violence costs women financially</a>
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<p>We asked whether any insurance company used modelling to estimate the risk or extent of property damage related to domestic and family violence. None did. </p>
<p>Yet it has been estimated that “consumption costs” (such as replacing damaged property, defaulting on bad debts, and the cost of moving) of partner violence against women and their children in 2021–22 could be $3.5 billion, including $202 million in damaged and destroyed property. <a href="https://www.dss.gov.au/sites/default/files/documents/05_2012/vawc_economic_report.pdf">Most</a> of these costs are borne by victim-survivors and family and friends.</p>
<h2>What needs to happen?</h2>
<p>To address these issues with joint policies, three changes are needed:</p>
<ul>
<li><p>close the loopholes that enable perpetrators to cancel insurance policies without the knowledge or consent of victim-survivors</p></li>
<li><p>introduce a “conduct of others” clause as a standard part of every insurance contract, enabling victim-survivors to make a claim when perpetrators deliberately damage property</p></li>
<li><p>modernise the law so insurance products can be redesigned with features that protect against financial abuse. </p></li>
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<a href="https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="The silhouette of a woman looking down in a dark room" src="https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/580045/original/file-20240306-24-akojh8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Financial abuse through insurance can compound the negative affects of domestic and family violence.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/trouble-problem-concept-domestic-violence-upset-2076039835">Shutterstock</a></span>
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<p>As a starting point, every general insurer should denounce financial abuse in their terms and conditions – following the lead of the Australian banking industry. So far, 14 banks have adopted this recommendation and are refusing to tolerate misuse of their products as a tactic of coercive control. </p>
<p>These changes would build on the significant progress the general insurance industry has made to support victim-survivors and drive greater consistency. The General Insurance Code of Practice sets a benchmark for self-regulation, and detailed guidance outlines better customer service practices for those experiencing domestic and family violence. All insurers are required to have a domestic and family violence policy, and some insurers have set up specialist teams and provided extra training. </p>
<p>The law also needs to be modernised because it’s stifling changes that would give victim-survivors better protection. </p>
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<em>
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Read more:
<a href="https://theconversation.com/when-care-becomes-control-financial-abuse-cuts-across-cultures-70754">When care becomes control - financial abuse cuts across cultures</a>
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<p>The Insurance Contracts Act was written in 1984, just ten years after the first modern women’s refuge was established in Australia and well before domestic and family violence became an urgent national conversation. </p>
<p>Despite calls in <a href="https://treasury.gov.au/sites/default/files/2022-08/p2004-review-insurance-contracts-act-1984-final-report_1.pdf">2004</a> and <a href="https://financialrights.org.au/wp-content/uploads/2021/08/210823_FamilyViolenceResearch_FINAL.pdf">2021</a> for the law to address cases in which a victim-survivor was denied a claim because of a wilful act or other breach by the perpetrator, legislation remains unchanged. Yet this type of behaviour is one of the <a href="https://www.allianz.com.au/content/dam/onemarketing/aal/au_site/documents/about-us/understanding-family-violence-and-the-risks-of-insurance.pdf">most common</a> ways insurance is used in family violence. </p>
<p>Two insurers, <a href="https://www.aami.com.au/aami/documents/personal/home/aami-home-building-insurance-pds.pdf">AAMI</a> and <a href="https://www.suncorp.com.au/content/dam/suncorp/insurance/suncorp-insurance/documents/home-and-contents/home/suncorp-insurance-home-contents-insurance-product-disclosure-statement.pdf">Suncorp</a>, have introduced a “conduct of others” clause to provide flexibility to pay a claim in these cases, even where there is no legal requirement to do so. </p>
<p>While these are positive moves, it’s slow progress. It’s time Australian insurers and regulators addressed this gap.</p><img src="https://counter.theconversation.com/content/224632/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Catherine Fitzpatrick is Founder and Director of Flequity Ventures, a social enterprise which aims to disrupt financial abuse and gender bias through more flexible, safe and equitable product and service design. She received funding from the Centre for Women's Economic Safety to write the Designed to Disrupt report and continues to be affiliated. She is a former bank executive with roles managing customer complaints including those related to general insurance, domestic violence support and government relations. She has previously been engaged by the Insurance Council of Australia to provide guidance on safety by design in insurance.</span></em></p>
Insurance is supposed to be a safety net, but it can be weaponised in domestic and family violence situations. There’s a lot we can do to better protect victim-survivors.
Catherine Fitzpatrick, Adjunct Associate Professor, School of Social Sciences, UNSW Sydney
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/217055
2024-03-07T13:28:59Z
2024-03-07T13:28:59Z
How Florida’s home insurance market became so dysfunctional, so fast
<p>Imagine saving for years to buy your dream house, only to have <a href="https://www.insurancebusinessmag.com/us/news/property/homeowners-to-face-huge-premium-jump-as-insurers-seek-50-premium-hike-476805.aspx">surging property insurance costs</a> keep homeownership forever out of reach. </p>
<p>This is a common problem in Florida, where average insurance premiums cost homeowners an eye-watering <a href="https://www.newsnationnow.com/business/your-money/florida-home-insurance-prices">US$6,000 a year</a>. That’s <a href="https://www.npr.org/2023/10/26/1208590263/florida-homeowners-insurance-soaring-expensive">more than triple</a> the national average and about three times what Floridians paid on average for insurance premiums in 2018. </p>
<p>What’s more, several major insurance carriers have <a href="https://www.pnj.com/story/money/2023/07/12/florida-insurance-crisis-farmers-insurance-home-insurance-what-to-know/70407302007/">left the state</a> over the past year, leaving residents with <a href="https://www.bloomberg.com/news/articles/2023-08-10/hurricane-season-2023-florida-s-biggest-property-insurer-is-nonprofit-citizens?sref=Hjm5biAW">limited alternatives</a>.</p>
<p>As <a href="https://www.ju.edu/directory/latisha-nixon-jones.php">a law professor</a> who specializes in disaster preparedness and resilience, I think it’s important to understand what’s driving costs higher – not least because other states could soon face a similar predicament. </p>
<p>Three primary factors are driving the insurance challenge. First, natural disasters are becoming more common and costly. Second, <a href="https://www.investopedia.com/terms/r/reinsurance.asp">the price of reinsurance</a> is skyrocketing. And finally, Florida’s litigation-friendly environment compounds the issue by making it easy for customers to sue their insurers.</p>
<h2>Disasters, like sea levels, are on the rise</h2>
<p>With its location on the beautiful-yet-hurricane-prone Gulf of Mexico, Florida has long been vulnerable to the elements. Natural disasters cost the state <a href="https://edis.ifas.ufl.edu/publication/FE1075">$5 billion to $10 billion</a> every year, the federal government estimated in 2018, the last year for which data was available.</p>
<p>Yet that likely understates the case today, since disasters have only become bigger, more common and more expensive since then. For example, climate change has <a href="https://abcnews.go.com/US/climate-change-making-atlantic-hurricanes-strengthen-weak-major/story.">made oceans warmer</a>, which <a href="https://doi.org/10.1038/s41598-023-42669-y">research suggests</a> fuels stronger, more intense hurricanes. </p>
<p>As a result, Florida has experienced billion-dollar disasters an average of <a href="https://www.ncei.noaa.gov/access/billions/state-summary/FL">four times annually</a> over the past five years – up from about one each year in the 1980s.</p>
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<p>This surge in disasters doesn’t just put lives at risk; it also wreaks havoc with the insurance market, as carriers are inundated with claims from one catastrophe after another. This makes it harder for them to turn a profit or obtain reinsurance to protect their stakeholders.</p>
<h2>Why reinsurance matters</h2>
<p>Insurance companies, in essence, make money two ways. First, they <a href="https://doi.org/10.1038/s41562-021-01121-9">pool risk</a> among policyholders. Risk-pooling is the practice of taking similarly situated individuals or properties, grouping them together, and charging similar prices for insurance since they face the same risk.</p>
<p>Second, they reduce risk by acquiring reinsurance. Reinsurance acts as a safeguard for insurance companies – it’s essentially insurance for the insurers. Reinsurers pledge to cover a specified portion or type of insurance claim – for instance, catastrophic hurricanes – which provides a layer of financial protection.</p>
<p>The new era of climate disasters has thrown a wrench into the process. Reinsurance companies, grappling with a surge in claims due to more frequent and severe disasters, have found themselves forced to <a href="https://www.law.com/dailybusinessreview/2023/07/12/floridas-critical-reinsurance-market-improves-but-at-a-price/?slreturn=20231012224549">raise their premiums</a> for insurance carriers. Carriers, in turn, have passed the burden to policyholders.</p>
<p>To try to navigate these challenges, some companies have chosen to limit coverage for specific types of damage. For example, some insurance companies in Florida will no longer offer hurricane or flood coverage. And in extreme cases, insurance companies have withdrawn entirely from the state. </p>
<p>Understanding this complex relationship between insurers, reinsurers and policyholders is key to understanding the broader implications of the <a href="https://www.fox13news.com/news/florida-home-insurance-crisis-cost-price-premium-institute-rates">Florida insurance crisis</a>. It underscores the urgent need for comprehensive solutions and collaborative efforts to address evolving challenges in the insurance ecosystem.</p>
<h2>Learning from Florida … one way or another</h2>
<p>Florida isn’t taking all this sitting down. In December 2022, state lawmakers responded to growing property market instability by passing <a href="https://www.flsenate.gov/Session/Bill/2022A/2A">Senate Bill 2A</a>, a package of insurance reforms. </p>
<p>One major part was a rule change designed to discourage policyholders from suing their insurers. Previously, Florida law let insured individuals recover attorney fees if they secured any amount through litigation against their insurer. </p>
<p>The idea is that making this change will discourage needless lawsuits. However, my research as an <a href="https://engagedscholarship.csuohio.edu/clevstlrev/vol71/iss3/5/">environmental justice professor</a> shows that attempts to exclude attorneys from the negotiation process often lead to more expensive litigation and less access to justice.</p>
<p>The bill also restricts <a href="https://www.myfloridacfo.com/docs-sf/insurance-consumer-advocate-libraries/ica-documents/aob-consumer-protection-tips-brochure.pdf?sfvrsn=690bdde6_5">assignment of benefits</a>, a mechanism that permits third-party entities like roofing companies to negotiate with insurance companies on behalf of Florida residents. While assignment of benefits <a href="https://www.myfloridacfo.com/division/consumers/consumerprotections/assignmentofbenefits">increased advocacy</a>, it was also linked to skyrocketing claims costs.</p>
<p>The balancing act between providing ample opportunities and containing costs has <a href="https://floridaphoenix.com/2023/10/13/advocates-hailed-a-new-law-to-help-stabilize-fls-housing-crisis-but-implementation-has-been-rocky/">sparked debate</a> among justice advocates. Florida’s legislative response reflects an ongoing effort to strike an equilibrium, ensuring fairness and accessibility while addressing the challenges faced by both insurers and policyholders.</p>
<p>Florida’s actions to address the property insurance crisis raise a critical question: Will the state serve as a blueprint for disaster-prone regions, or act as a cautionary tale? After all, states such as California and Louisiana have also seen insurance companies withdrawing from their markets. Will their legislatures draw inspiration from Florida’s? </p>
<p>For now, it’s too early to tell: The policies have only been in place since the latest round of hurricanes. But in the meantime, the rest of the U.S. will be watching – especially policymakers who care about resilience, and those who want to make sure vulnerable populations don’t get the short end of the stick.</p><img src="https://counter.theconversation.com/content/217055/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Latisha Nixon-Jones does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Florida home insurance premiums have shot up threefold in just five years.
Latisha Nixon-Jones, Associate Professor of Law, Jacksonville University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/220754
2024-01-11T13:26:11Z
2024-01-11T13:26:11Z
Blizzards are inescapable − but the most expensive winter storm damage is largely preventable
<figure><img src="https://images.theconversation.com/files/568721/original/file-20240110-17-o6v3sj.jpg?ixlib=rb-1.1.0&rect=0%2C11%2C3955%2C2616&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Wrecks during snowstorms can shut down highways, stranding drivers in the cold for hours.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/wyomissing-pa-a-tow-truck-works-on-freeing-a-stuck-tractor-news-photo/1303555959">Ben Hasty/MediaNews Group/Reading Eagle via Getty Images</a></span></figcaption></figure><p>Winter storms can easily become <a href="https://www.munichre.com/en/risks/natural-disasters/winter-storms.html">billion-dollar disasters</a> as the snow piles up on interstates and collapses roofs and power lines. Yet, while canceled flights and business interruptions can’t be avoided, what turns a snowstorm into a disaster often can be.</p>
<p><a href="https://scholar.google.com/citations?hl=en&user=2naNhTEAAAAJ">I have worked on engineering strategies</a> to enhance disaster resilience for over three decades and recently wrote a book, “<a href="https://rowman.com/ISBN/9781633888234/The-Blessings-of-Disaster-The-Lessons-That-Catastrophes-Teach-Us-and-Why-Our-Future-Depends-on-It">The Blessings of Disaster</a>,” about the gambles humans take with disaster risk. Snowstorms stand out for how preventable much of the damage really is.</p>
<h2>Stay off the roads</h2>
<p>The easiest storm costs to avoid involve human behavior, including driving during snowstorms.</p>
<p>Successfully plowing the snow off a highway requires repeated passes to prevent snow from accumulating to the point where it piles up faster than it can be removed. However, that simple concept breaks down when an accident blocks the lanes, and traffic – including commerce and emergency vehicles – grinds to a halt.</p>
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<p>When it takes snowmobiles to reach stranded drivers, the wait can be long and in <a href="https://www.kiro7.com/news/trending/woman-dies-after-getting-trapped-car-18-hours-by-snow-family-says/DVPZD7LWW5G6FL2TAIHX3VZPEE/">some cases lethal</a>. Hundreds of people were <a href="https://www.reuters.com/markets/commodities/drivers-trapped-cars-after-us-snowstorm-shuts-major-road-virginia-2022-01-04/">stranded for up to 24 hours</a> on Interstate 95 during a snowstorm in Virginia in 2022.</p>
<p>Unfortunately, partly due to economic pressures, many people won’t stay home during a blizzard unless authorities close the roads or impose driving bans. Those who venture out should <a href="https://www.weather.gov/ilx/winter_drive2_social">be prepared to survive hours in the cold</a> and have proper gear to avoid <a href="https://www.livescience.com/6008-person-freeze-death.html">freezing to death</a>. It’s one reason the <a href="https://www.startribune.com/shorts-in-winter-why-some-minnesotans-stick-to-their-summer-finest/566656091/">fad of wearing shorts</a>, T-shirt and <a href="https://www.psucollegian.com/news/borough/why-do-penn-state-students-wear-shorts-during-the-winter/article_26c0d230-0c39-11e8-9b39-3bbbaf5414bc.html">flip-flops in winter</a> is ill-advised.</p>
<h2>Pay attention to roofs</h2>
<p>One snowflake at a time, wet snow can pile up to a weight of 30 pounds per cubic foot on a rooftop – enough to collapse a structure that is too light or not well designed. Although roof collapses are <a href="https://doi.org/10.1061/(ASCE)CF.1943-5509.0000222">relatively rare</a>, they are expensive and can take months to repair.</p>
<p>How snow builds up on a roof depends on a variety of factors, including the height of the snow accumulation and whether anything prevents the snow from blowing or sliding away.</p>
<figure class="align-center ">
<img alt="A vehicle drives past a show with the roof bowed all the way to the ground with a thick layer of snow on top." src="https://images.theconversation.com/files/568714/original/file-20240110-15-hir48o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568714/original/file-20240110-15-hir48o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=425&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568714/original/file-20240110-15-hir48o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=425&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568714/original/file-20240110-15-hir48o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=425&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568714/original/file-20240110-15-hir48o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=534&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568714/original/file-20240110-15-hir48o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=534&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568714/original/file-20240110-15-hir48o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=534&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Heavy snow in 2014 collapsed this automotive shop’s roof in Hamburg, N.Y.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/WintryWeather/959b64339c3c49c5b6585aee615c6b51/photo">AP Photo/Mike Groll</a></span>
</figcaption>
</figure>
<p>Building codes specify the minimum snow weights that roofs must be able to handle to be safe. These have been updated over decades to minimize the risk of roofs failing, and they are <a href="https://www.structuremag.org/?p=19724">still improving</a>.</p>
<p>The national maps used to compute minimum snow loads were <a href="https://www.structuremag.org/?p=19528">updated in 2022</a> to include 30 years of additional snow load data. As a result, the amount of snow that new building designs <a href="https://steeljoist.org/wp-content/uploads/2022/02/SJI_Feb_Webinar_SnowLoads_022122_1Slide.pdf">should be able to handle</a> is up to <a href="https://assets.ccaps.umn.edu/documents/CPE-Conferences/structural/2022Structural722ASCE.pdf">80% larger than before</a> in some locations and as much as 40% less in others. For example, snow loads for new construction in New York City; Baltimore; Washington, D.C.; Reno, Nevada; Casper, Wyoming; and Beckley, West Virginia, are all significantly higher now than in the past.</p>
<p>Unfortunately, many cities and states have no buildings codes or have outdated ones. In 2022, the Federal Emergency Management Agency scored each state based on the stringency of its building codes on a 100-point scale, and <a href="https://www.scientificamerican.com/article/most-states-are-failing-on-building-codes-fema-says/">19 states received a score of 0</a>.</p>
<figure class="align-center ">
<img alt="Two men shovel snow off a roof. The snow is is higher than their waists." src="https://images.theconversation.com/files/568713/original/file-20240110-21-v76dmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568713/original/file-20240110-21-v76dmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=395&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568713/original/file-20240110-21-v76dmp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=395&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568713/original/file-20240110-21-v76dmp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=395&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568713/original/file-20240110-21-v76dmp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=496&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568713/original/file-20240110-21-v76dmp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=496&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568713/original/file-20240110-21-v76dmp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=496&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Shoveling snow from rooftops is dangerous, but the weight of too much snow can collapse a weak or older roof.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/WintryWeatherPhotoGallery/4ac5affce0ca47148de8d5427e0af75d/photo">AP Photo/Gary Wiepert</a></span>
</figcaption>
</figure>
<p>To help them improve, <a href="https://www.scientificamerican.com/article/fema-offers-every-state-2-million-to-adopt-safer-building-codes/">FEMA is offering every state $2 million</a> this year to spend on enhancing its existing codes, studying new codes or training employees in using codes.</p>
<p>Better building codes help improve new construction, but older homes and buildings may still be at risk of a possible roof collapse during a heavy snowstorm.</p>
<p>Homeowners and business owners have a few options: Invest in an <a href="https://www.fema.gov/sites/default/files/documents/fema957_snowload_guide.pdf">engineering assessment of the existing roof</a> and then strengthen the roof if needed. Have a team on standby to shovel snow off the roof, which <a href="https://www.fema.gov/sites/default/files/2020-07/fema_snow_load_2014.pdf">can be dangerous</a> and a <a href="https://www.wje.com/knowledge/webinars/detail/snow-loads-webinar">major undertaking</a> for the flat roofs of large warehouse and industrial facilities, for example. Or gamble on insurance covering the full cost of repairs. </p>
<p><iframe id="eHNPp" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/eHNPp/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Prepare for power outages</h2>
<p>When it comes to infrastructure failure during snowstorms, power outages can be the biggest problem.</p>
<p>In 1998, an ice storm dumped freezing rain and drizzle for more than 80 hours on parts of eastern Canada and the Northeastern United States. As ice accumulated to as much as 3 to 4 inches near Montreal, <a href="https://www.wqad.com/article/weather/how-ice-storms-impact-the-power-grid/526-d582a4d4-c336-4422-a18e-5d1e0a7d0da8">the weight</a> snapped tree branches, caused power lines to collapse and <a href="https://www.weather.gov/btv/25th-Anniversary-of-the-Devastating-1998-Ice-Storm-in-the-Northeast">crumpled hundreds of transmission towers</a>, leaving more than <a href="http://news.hydroquebec.com/en/press-releases/1313/twenty-years-ago-quebec-was-battered-by-an-ice-storm/">3 million people there without power for several days</a> in early January. In large parts of Montreal’s South Shore, <a href="https://en.wikipedia.org/wiki/January_1998_North_American_ice_storm">150,000 people were without power for up to three weeks</a> following the storm.</p>
<p>Winter storm Uri in 2021 was even more destructive, as it knocked out power in Texas and froze several other states, causing about US$<a href="https://www.munichre.com/en/risks/natural-disasters/winter-storms.html">30 billion in losses</a> – only about half of that insured.</p>
<p>Nearly everything today depends on reliable power – infrastructure systems, companies, vehicles and even agriculture. When the power failed during the 1998 storm, heating and ventilation systems stopped working. Pipes burst. <a href="https://www.cbc.ca/news/canada/ice-storm-devastates-farm-livestock-1.165771">Farm animals froze to death or died of asphyxiation by the thousands</a>.</p>
<figure class="align-center ">
<img alt="A police car blocks a road where an ice-covered powerline has fallen." src="https://images.theconversation.com/files/568712/original/file-20240110-27-nsu57k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568712/original/file-20240110-27-nsu57k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=385&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568712/original/file-20240110-27-nsu57k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=385&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568712/original/file-20240110-27-nsu57k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=385&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568712/original/file-20240110-27-nsu57k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=484&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568712/original/file-20240110-27-nsu57k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=484&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568712/original/file-20240110-27-nsu57k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=484&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Ice storms like this one in the Northeast in 2018 can take down miles of power lines, causing blackouts.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/NortheastStorm/177f72669ed14f50b91ae0bb363444e6/photo">AP Photo/Steven Senne</a></span>
</figcaption>
</figure>
<p>Many industry sectors depend on the existing power infrastructure and operate without redundancy that could keep them running when the power goes out. While these optimized systems are slim, efficient and cost-effective – all good things under normal operating conditions – they are not resilient. Resilience, which is the ability to withstand or to recover quickly from extreme events, benefits from having a Plan B ready to deploy.</p>
<p>Power utilities nationwide have tree-trimming programs to minimize the risk of storms bringing branches down on power lines, and some <a href="https://www.fema.gov/case-study/overhead-underground-it-pays-bury-power-lines">utilities are burying power lines</a>, but power outages are still expected. Businesses and homeowners having a Plan B can minimize the risk of costly losses. Insulating water pipes can help avoid the risk of pipes bursting. Backup generators can help if operated safely to avoid hazards <a href="https://www.cpsc.gov/Newsroom/News-Releases/2007/CPSC-Warns-Winter-Storm-Victims-Use-Portable-Generators-Outdoors-Only1">such as fires and carbon monoxide poisoning</a>.</p>
<p>In short, staying off roads, under a roof that can handle the snow, and being prepared for what could be long power outages would help make snowstorms a day off rather than a disaster.</p><img src="https://counter.theconversation.com/content/220754/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michel Bruneau does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Costs quickly rise when things go wrong with roads, roofs and power lines. Many of those risks are also avoidable.
Michel Bruneau, Professor of Engineering, University at Buffalo
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/218126
2023-12-28T20:37:40Z
2023-12-28T20:37:40Z
Could you cope with a shock to your bank balance? 5 ways to check you are financially resilient
<p>Imagine the dentist has just said you urgently need a A$2,000 dental crown. A week later, a pipe in your bathroom bursts, causing $8,000 worth of damage. Suddenly, you’ve been hit with a $10,000 financial shock.</p>
<p>As the cost-of-living crisis plunges more households into financial uncertainty and at least <a href="https://melbourneinstitute.unimelb.edu.au/data/taking-the-pulse-of-the-nation-2022/2023/australians-face-challenging-budgetary-constraints#:%7E:text=Over%20the%20past%20six%20months,has%20increased%20to%2060%20percent.">one-third</a> of Australians struggle to make ends meet, it’s more important than ever to ask yourself: how financially resilient am I?</p>
<p>Being financially resilient means you aren’t left financially devastated when an expensive emergency creeps up on you. Here are five key signs of financial resilience.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/kids-and-money-five-ways-to-start-the-conversation-193632">Kids and money: five ways to start the conversation</a>
</strong>
</em>
</p>
<hr>
<h2>1. You have a plan for what you’d do if you suddenly lost your salary</h2>
<p>Financial resilience means having a plan to fall back on during tough times. This extends to how you’d make money if you lost your job.</p>
<p>In practice, that means things like making sure your skills and contacts are kept up to date so you can more easily find a new job. You might also consider whether a “side hustle” job such as tutoring could work for you in the short term, and how you’d put that plan into practice if needed. Perhaps you have a spare room in your home you could rent out for a period of time if you lost your salary. </p>
<p>Those examples won’t work for everyone, of course, but it’s still worth asking yourself the question: what would I do if I lost my salary tomorrow?</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A worried father looks at his phone while his daughter sits in the background." src="https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/563490/original/file-20231204-15-i1rzz2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">It’s good to think about how you’d handle a difficult financial situation – well before disaster strikes.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-father-looking-smart-phone-holding-482556850">Shutterstock</a></span>
</figcaption>
</figure>
<h2>2. You have enough liquid assets to meet an unexpected financial expense</h2>
<p>Liquid assets means money that can be accessed quickly and easily to overcome an unplanned financial expense. Savings are a good example. They provide a buffer so you can cope in the short term if a financial shock strikes. The federal government’s Moneysmart website suggests you aim to have enough in your emergency savings fund to cover <a href="https://moneysmart.gov.au/saving/save-for-an-emergency-fund">three months of expenses</a>.</p>
<p>Having an <a href="https://moneysmart.gov.au/glossary/offset-account">offset account</a> as part of a mortgage is another option that provides a buffer. Putting money in an offset account helps you save while reducing the amount of interest on a home loan. You can still access the money in an offset account at any time.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1712058155063022023"}"></div></p>
<h2>3. You have bought the right financial products, such as insurance</h2>
<p>Financial products, such as insurance, hedge against potential losses.</p>
<p>Personal insurance is important because it provides income in the event of death, illness or injury. Examples include:</p>
<ul>
<li><p>life insurance (which pays out to your beneficiaries, such as your partner or children, when you die)</p></li>
<li><p>total and permanent disability insurance (which means you may get some money if you acquire a disability that prevents you from working)</p></li>
<li><p>income protection (which provides you with an income if you can no longer work)</p></li>
<li><p>trauma cover (which covers a life-changing illness or injury, such as cancer or a stroke).</p></li>
</ul>
<p>Check if your superannuation has any of these insurances included in it. <a href="https://www.griffith.edu.au/__data/assets/pdf_file/0030/295770/FPRJ-V4-ISS1-pp-53-75-insurance-literacy-in-australia.pdf">Research</a> has found that many Australians are underinsured.</p>
<h2>4. You can still pay your debts when times are tough</h2>
<p>Being able to borrow money can help when you’re in a tight spot. But knowing where to borrow from, how much to borrow and how to manage debt repayments is crucial.</p>
<p>Financially resilient people use debt responsibly. That means: </p>
<ul>
<li><p>not using debt for frivolous expenses like after-work drinks </p></li>
<li><p>staying away from private money lenders</p></li>
<li><p>being cautious about buy-now-pay-later services</p></li>
<li><p>watching out for debts with high interest rates, such as payday loans and credit card debt</p></li>
<li><p>maintaining debt repayments consistently.</p></li>
</ul>
<p>If you’re having debt problems, talk to your lender about renegotiating your repayment arrangements, or contact the <a href="https://ndh.org.au/">National Debt Helpline</a> on 1800 007 007.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A woman looks at her computer while holding a credit card." src="https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/563494/original/file-20231204-29-w1vfxx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Credit card debt can come with high interest rates.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/concentrated-millennial-generation-african-multiracial-woman-1978757975">Shutterstock</a></span>
</figcaption>
</figure>
<h2>5. You are financially literate</h2>
<p>Being financially literate means you can assess the benefits and risks of using savings or taking out debt to meet an unplanned financial need. </p>
<p>As I have <a href="https://theconversation.com/are-you-financially-literate-here-are-7-signs-youre-on-the-right-track-202331">written</a> before on The Conversation, key signs of financial literacy include tracking your cashflow, building a budget, as well as understanding what debts you have and which to pay first. </p>
<p>It also means storing your money across different places (such as superannuation, savings accounts, property and the share market) and understanding how financial assets like cash, shares and bonds work.</p>
<p>Being aware of your financial strengths and weaknesses, and having financial goals is also important.</p>
<p>Nobody is born knowing how to make sound financial decisions; it’s a skill that must be learned. </p>
<p>It’s good to think about the resources you would draw upon to help get yourself out of a difficult financial situation – well before disaster strikes.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/battling-to-make-ends-meet-financial-planning-expert-offers-5-tips-on-how-to-build-your-budget-214861">Battling to make ends meet? Financial planning expert offers 5 tips on how to build your budget</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/218126/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bomikazi Zeka does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Being financially resilient means you aren’t left financially devastated when an expensive emergency creeps up on you.
Bomikazi Zeka, Assistant Professor in Finance and Financial Planning, University of Canberra
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/218315
2023-11-23T12:59:15Z
2023-11-23T12:59:15Z
Ukraine war: it may be stalemate on land, but Kyiv’s Black Sea success could bring wider benefits this winter
<p>As the attention of the world centres on the war in Gaza, many commentators believe that the war in Ukraine is becoming a <a href="https://theconversation.com/ukraine-war-are-both-sides-preparing-for-stalemate-217848">stalemate</a>. To date, Ukraine’s highly anticipated summer counteroffensive has not resulted in any substantial territorial gain, and Russia has not made any progress either.</p>
<p>In military terms, a stalemate is not necessarily negative, depending on your perspective. It’s a chance to replenish ammunition stocks (for instance, Russia’s limited supply of missiles) or procure new key weapons systems for the next phase of the war (Ukraine’s acquisition of F-16 fighter jets.</p>
<p>In political and diplomatic terms, a stalemate enables both sides to rally their allies and partners – see Moscow’s <a href="https://www.aljazeera.com/news/2023/11/20/russian-diplomacy-leverages-israel-hamas-war-for-moral-high-ground">public relations offensive</a> in the Middle East to capitalise on the effects of the Israel-Hamas war. But it can also contribute to <a href="https://www.ft.com/content/ed11bbc1-24ed-497e-acfd-6c1b5ca966ac">war fatigue</a> – and we are seeing a degree of this among Kyiv’s allies in the west.</p>
<p>However, this notion of a stalemate neglects the war’s maritime dimension, which has evolved fairly dramatically <a href="https://theconversation.com/russias-plan-to-relocate-its-black-sea-naval-base-from-crimea-is-priceless-for-ukraines-morale-216381">in Ukraine’s favour</a> in recent months. With winter coming, recent successes in the Black Sea appear to offer Ukraine substantial tactical, strategic and political advantages.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/russias-plan-to-relocate-its-black-sea-naval-base-from-crimea-is-priceless-for-ukraines-morale-216381">Russia's plan to relocate its Black Sea naval base from Crimea is priceless for Ukraine's morale</a>
</strong>
</em>
</p>
<hr>
<p>Kyiv claims that since the beginning of the war, Ukrainian forces have <a href="https://www.reuters.com/world/europe/ukraine-says-it-has-destroyed-15-russian-naval-vessels-black-sea-during-war-2023-11-17/">damaged or destroyed</a> 27 warships and vessels belonging to Russia’s Black Sea fleet, including the fleet’s flagship, the 11,000-ton cruiser Moskva, as well as one of Russia’s Kilo-class submarines that carries cruise missiles. </p>
<p>With Russia’s naval base at Sevastopol considered <a href="https://www.businessinsider.com/russia-lost-control-over-black-sea-ships-move-ports-expert--2023-10?r=US&IR=T">no longer safe</a> after a series of successful Ukrainian attacks, much of Russia’s Black Sea fleet has had to relocate to the port of Novorossiysk on the Russian mainland. Moving its remaining Kilo-class submarines <a href="https://twitter.com/DefenceHQ/status/1572085839370539010">to safer locations</a> is important for Russia because it cannot afford to lose anymore of these expensive and scarce vessels.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Map of Black Sea including Novorossiysk." src="https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/561048/original/file-20231122-17-a9kjqw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Russia has shifted naval assets away from its Black Sea fleet base to Novorossiysk.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/crimea-august-23-2023-map-cartography-2351365007">Michele Ursi/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Tactical and strategic implications</h2>
<p>This winter, we can again expect Russia to try to degrade Ukraine’s energy infrastructure, as it <a href="https://www.lemonde.fr/en/international/article/2023/04/13/russia-fails-to-break-ukraine-morale-by-targeting-energy-infrastructure_6022862_4.html#">attempted to do</a> last year. Russia used Kalibr cruise missiles launched from the Black Sea as part of this strategy, creating additional vectors of penetration to saturate Ukraine’s air defence capabilities. </p>
<p>But the repositioning of the Black Sea Fleet further away from Ukraine will have a <a href="https://www.newsweek.com/russian-black-sea-fleet-logistical-problems-sevastopol-novorossiysk-kalibr-1844028">negative effect</a> on Moscow’s logistics and tactical options this time around. And in a long war – such as this conflict is predicted to be – denying the enemy even one tactical option can have synergistic effects on the overall conduct of operations.</p>
<p>The impacts of Ukraine’s successful harassment and <a href="https://theconversation.com/ukraine-war-capture-of-key-black-sea-outposts-and-strike-on-crimea-show-kyivs-increasing-confidence-213380">strikes against</a> Russia’s Black Sea assets – its warships, shipyards, command centres and air defence sites – are apparent well beyond the Black Sea. </p>
<p>Here’s why: the situation on the ground in Ukraine has become a slog, as both Russia and Ukraine are trying to <a href="https://www.businessinsider.com/ukraine-winter-goal-target-russia-logistics-soldiers-hungry-cold-2023-11?r=US&IR=T">exhaust</a> each other and their allies. So Ukraine’s campaign in the Black Sea, which has increased the vulnerability of Crimea, has a great deal of significance. While it is unlikely to provide a direct opportunity for Kyiv to retake the peninsula any time soon, the perceived threat obliges Moscow to devote attention and limited resources to the defence of Crimea, which will affect its overall strategy of attrition.</p>
<h2>Insurance deal</h2>
<p>The relocation of Russia’s naval resources away from Ukraine’s main trading routes in the northwestern Black Sea has weakened Russia’s attempted blockade of Ukraine. In the words of the Ukrainian president, <a href="https://www.reuters.com/world/europe/ukraine-seizes-initiative-russia-black-sea-zelenskiy-2023-11-16/#">Volodymyr Zelensky</a>: “Russia is unable to use the Black Sea as a springboard to destabilise other regions of the world.”</p>
<p>Moving its naval assets <a href="https://theconversation.com/russias-plan-to-relocate-its-black-sea-naval-base-from-crimea-is-priceless-for-ukraines-morale-216381">further away</a> from its base at Sevastopol has not completely prevented Russia from targeting civilian shipping, though. On November 9, a Russian missile <a href="https://www.reuters.com/world/europe/ukraine-says-russian-missile-hits-vessel-black-sea-kills-one-2023-11-08/">hit and damaged</a> a civilian vessel sailing under a Liberian flag as it entered a Black Sea port in the Odesa region, killing one and injuring four people. This led to a <a href="https://www.reuters.com/markets/commodities/ukraine-grain-exports-via-new-black-sea-corridor-hit-4-mln-t-zelenskiy-2023-11-14/">spike in insurance premiums</a>.</p>
<p>Blockades only work if they make the operational and financial risks for ship operators and insurers too high, so it’s crucial that Kyiv can act to increase confidence in Ukraine among the global shipping sector. The first step has been to reduce the threat posed by the Russian navy; the next is to reduce risk perception and normalise maritime trade to and from Ukraine.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1726638439578435833"}"></div></p>
<p>Importantly, despite the incident with the Liberian-flagged ship, Kyiv has managed to <a href="https://www.reuters.com/business/marsh-lloyds-launch-ukraine-war-risk-ship-insurance-cut-grain-costs-2023-11-15/">finalise a deal</a> with a group of 14 British insurers that enables discounted insurance premiums (compared to high war premiums) thanks to a mechanism of state financial backing. Announcing the deal, the Ukrainian prime minister, Denys Shmyhal, explained: </p>
<blockquote>
<p>It will make it possible to make a discount on the cost of insurance against military risks for exporters of all products from Ukraine. This will make the Black Sea corridor more accessible to a wider range of exporters.</p>
</blockquote>
<p>The more ships that are able to move goods in and out of Ukraine, the more this will demonstrate that, despite Russia’s attempts to block Ukraine’s ability to trade, there is a lower risk involved – thus creating a new cycle of confidence within the maritime sector, and reinforcing the idea that the Russian blockade is obsolete.</p>
<p>Kyiv’s key allies, including the <a href="https://www.gov.uk/government/news/ukraine-foreign-secretary-is-first-uk-minister-to-visit-odesa">UK</a>, appear to understand the advantage that Ukraine now holds in the Black Sea. Despite the apparent stalemate on land, Ukraine’s successes at sea will ensure its resilience in the longer term.</p><img src="https://counter.theconversation.com/content/218315/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Basil Germond does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Ukraine’s successes against Russia’s Black Sea fleet have increased confidence in its ability to protect shipping in and out of its ports.
Basil Germond, Professor of International Security, Department of Politics, Philosophy and Religion, Lancaster University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/211482
2023-10-05T12:33:47Z
2023-10-05T12:33:47Z
Climate change is a fiscal disaster for local governments − our study shows how it’s testing communities in Florida
<figure><img src="https://images.theconversation.com/files/551841/original/file-20231003-27-j5xxho.jpg?ixlib=rb-1.1.0&rect=17%2C4%2C2977%2C2079&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Crews clear lots of destroyed homes in Fort Myers Beach, Fla., in February 2022, four months after Hurricane Ian.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/in-this-aerial-view-construction-crews-clear-lots-of-homes-news-photo/1459509524">Joe Raedle/Getty Images</a></span></figcaption></figure><p>Climate change is <a href="https://theconversation.com/looking-for-a-us-climate-haven-away-from-disaster-risks-good-luck-finding-one-211990">affecting communities nationwide</a>, but Florida often seems like ground zero. In September 2022, Hurricane Ian <a href="https://www.nytimes.com/2022/09/29/us/hurricane-ian-florida-damage.html">devastated southwest Florida</a>, killing at least 156 people and causing <a href="https://www.nhc.noaa.gov/data/tcr/AL092022_Ian.pdf">an estimated US$113 billion</a> in damages. Then Hurricane Idalia <a href="https://apnews.com/article/florida-hurricane-idalia-2136985ceea53f5deb600c43aeea1138">shut down the Florida Panhandle</a> in September 2023, augmented by a <a href="https://www.nytimes.com/2023/08/29/science/blue-supermoon.html">blue supermoon</a> that also increased <a href="https://www.tallahassee.com/story/news/local/2023/08/31/hurricane-idalia-super-blue-moon-unusual-post-landfall-storm-surge-into-wakulla-county/70726049007/">tidal flooding</a> in southeast Florida. </p>
<p>Communities can adapt to some of these effects, or at least <a href="https://floridaclimateinstitute.org/docs/climatebook/Ch11-Bloetscher.pdf">buy time</a>, by taking steps such as upgrading stormwater systems and raising roads and sidewalks. But climate disasters and sea-level rise also harm local governments financially by increasing costs and undercutting their property tax bases. Local reliance on property taxes also can discourage cities from steering development out of flood zones, which is essential for reducing long-term risks.</p>
<p>In a <a href="https://doi.org/10.1080/01944363.2023.2249866">newly published study</a> and supporting <a href="https://cugis.maps.arcgis.com/apps/MapSeries/index.html?appid=754b615fa5db4bbea0ed393a2c730163">online StoryMap</a>, we present the first-ever municipal fiscal impact assessment of sea-level rise in Florida and combine it with a statewide survey of coastal planners and managers. We wanted to know how sea-level rise would affect municipal tax revenues and whether coastal planners and managers are accounting for these fiscal impacts.</p>
<p>Our study finds that over half of Florida’s 410 municipalities will be affected by 6.6 feet of sea-level rise. Almost 30% of all local revenues currently generated by these 211 municipalities come from buildings in areas that will become chronically flooded, potentially by the <a href="https://oceanservice.noaa.gov/hazards/sealevelrise/sealevelrise-tech-report.html">end of the century</a>. Yet, planners and managers remain largely unaware of how much climate change will affect local fiscal health. Some communities with the most at risk are doing the least to prepare.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/6vTW7SOWp2Q?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">A year after Hurricane Ian, destruction is still widespread in Fort Myers Beach, Fla.</span></figcaption>
</figure>
<h2>Property tax and climate change: A Catch-22</h2>
<p>Property taxes are critically important for municipal governments. Nationwide, they provide <a href="https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/projects/state-and-local-backgrounders/property-taxes">30% of local revenues</a>. They are one of the few funding sources that local governments control, and climate change directly threatens them.</p>
<p>As climate change warms ocean waters, it <a href="https://theconversation.com/hurricane-ian-capped-2-weeks-of-extreme-storms-around-the-globe-heres-whats-known-about-how-climate-change-fuels-tropical-cyclones-191583">fuels hurricanes and increases their reach and intensity</a>. Climate change also is <a href="https://www.climate.gov/news-features/understanding-climate/climate-change-global-sea-level#">raising sea levels</a>, which increases coastal flooding during both storms and high tides, often referred to as <a href="https://www.wusf.org/environment/2021-07-15/sunny-day-high-tide-flooding-may-soon-affect-much-of-floridas-coast">sunny-day flooding</a>. Unlike storms, sea-level rise doesn’t recede, so it threatens to permanently inundate coastal lands over time. </p>
<p>Property tax revenues may decline as <a href="https://sgp.fas.org/crs/homesec/R45999.pdf">insurance companies</a> and <a href="https://floodcoalition.org/2020/05/how-could-rising-floodwaters-impact-your-homes-value/">property markets</a> downgrade property values to reflect climate impacts, such as increasing flood risks and wildfires. Already, a growing number of insurance companies have decided to <a href="https://www.washingtonpost.com/business/2023/09/03/natural-disaster-climate-insurance/">stop covering some regions and types of weather events</a>, raise premiums and deductibles and drop existing policies as payouts rise in the wake of natural disasters. Growing costs of insuring or repairing homes may further hurt property values and increase home abandonment. </p>
<p>Climate change also makes it more expensive to provide municipal services like water, sewage and road maintenance. For example, high heat buckles roads, rising water tables wash out their substructure, and heavier rains stress stormwater systems. If cities don’t adapt, increasing damage from climate-driven disasters and sea-level rise will create a vicious fiscal cycle, eroding local tax bases and driving up services costs – which in turn leaves less money for adaptation. </p>
<p>However, if cities reduce development in vulnerable areas, their property taxes and other revenues will take a hit. And if they build more seawalls and homes fortified to withstand hurricanes and storms, they will induce more people to live in harm’s way. </p>
<p>In Florida, we found that these theoretical dynamics are already occurring.</p>
<p><div data-react-class="InstagramEmbed" data-react-props="{"url":"https://www.instagram.com/reel/CwA3vzEIlF6","accessToken":"127105130696839|b4b75090c9688d81dfd245afe6052f20"}"></div></p>
<h2>Florida’s local revenues at risk</h2>
<p>Our analysis shows that sea-level rise could flood properties that have a combined assessed value of $619 billion and currently generate $2.36 billion in annual property taxes. Five million Floridians live in towns where at least 10% of local revenues comes from properties at risk of chronic and permanent flooding. For 64 municipalities, 50% of their revenues come from these risk zones. </p>
<p>Actual fiscal effects would likely be worse after accounting for other lost revenues, rising expenditures and the impacts of multiple climate hazards, such as hotter weather and more intense hurricanes.</p>
<p>These impacts are not evenly distributed. Municipalities with the greatest fiscal risks are geographically and demographically smaller, denser, wealthier and whiter. Lower-risk municipalities tend to be more populous, more diverse, lower-income and have larger land areas. </p>
<p>For instance, the 6,800 residents of the city of Treasure Island in southwest Florida are 95% white and have a median household income of $75,000. The town occupies 3 square miles of land on a barrier island. In our model, its potential lost revenues due to sea-level rise equal its entire municipal revenue stream. </p>
<p>In contrast, St. Petersburg, the nearest big city, has a population of 246,000 residents that is 69% white and a median household income of $53,800. It covers 72 square miles, with only 12% of its property tax revenues at risk from flooding.</p>
<p><div data-react-class="InstagramEmbed" data-react-props="{"url":"https://www.instagram.com/reel/CwjuLrJt4Uz","accessToken":"127105130696839|b4b75090c9688d81dfd245afe6052f20"}"></div></p>
<h2>Heads in the sand</h2>
<p>We see our findings as a wake-up call for state and local governments. Without urgent action to adapt to climate change, dozens of municipalities could end up fiscally underwater. </p>
<p>Instead, many Florida cities are pursuing continued growth through infrastructure expansion. Even after devastating events like Hurricane Ian, administrative boundaries, service obligations and budgetary responsibilities make it hard for municipal leaders to make room for water or retreat onto higher ground. </p>
<p>Treasure Island, for instance, is <a href="https://www.tbnweekly.com/beach_beacon/article_348defb2-0934-11e9-a4a4-eb7ed7651e85.html">allocating property taxes</a> to upgrade the town’s causeway bridge. This protects against modest climate impacts in the short term but will eventually be overwhelmed by bigger storm surges, rising water tables and <a href="https://www.climate.gov/news-features/understanding-climate/climate-change-global-sea-level#">accelerating sea-level rise</a>. </p>
<p>These dynamics can worsen <a href="https://e360.yale.edu/features/as-miami-keeps-building-rising-seas-deepen-its-social-divide">displacement and gentrification</a>. In Miami, developers are already buying and consolidating properties in longtime Black and lower-income neighborhoods like <a href="https://storymaps.arcgis.com/stories/33d28b4ae86840b5b27ea8ba4b4bcc4d">Little Haiti</a>, <a href="https://nextcity.org/features/miami-underdeck-overtown-black-community-gentrification-displacement">Overtown</a> and <a href="https://www.equaltimes.org/welcome-to-miami-speculation?lang=en">Liberty City</a> that are slightly more elevated than areas along the shore.</p>
<p>If this pattern continues, we expect that inland and upland areas of cities like St. Petersburg, Tampa and Miami will attract more resilient, high-end development, while displaced low-income and minority residents are forced to move either out of the region or to coastal zones with declining resources. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/PB_sVUXg4Lc?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Wealthy people in Miami are moving inland to avoid flooding, displacing lower-income residents and people of color.</span></figcaption>
</figure>
<h2>Charting a different future</h2>
<p>We don’t see this outcome as inevitable, in Florida or elsewhere. There are ways for municipalities to manage and govern land that promote fiscally sound, equitable and sustainable ways of adapting to climate change. The key is recognizing and addressing the property tax Catch-22. </p>
<p>As a first step, governments could assess how climate change will affect their fiscal health. Second, state governments could enact legislation that <a href="https://www.forbes.com/sites/forbesrealestatecouncil/2018/09/14/the-case-against-property-taxes-and-two-alternative-taxes-that-work/">expands local revenue sources</a>, such as sales or consumption taxes, vacancy taxes, stormwater impact fees and resilience bonds or fees.</p>
<p>Regional sharing of land and taxes is another way for small, cash-strapped communities to reduce development in vulnerable places while maintaining services for their residents. For example, New Hampshire passed a bill in 2019 to <a href="https://legiscan.com/NH/text/SB285/2019">allow coastal municipalities to merge</a> in response to sea-level rise. </p>
<p>Finally, state governments could pass legislation to help low-income neighborhoods gain more control over land and housing. Tested tools include <a href="https://nextcity.org/urbanist-news/a-lifeline-for-preserving-limited-equity-co-ops-in-new-york">limited equity cooperatives</a>, where residents buy an affordable share in a development and later resell at below-market prices to maintain affordability; <a href="https://www.nytimes.com/2023/07/08/realestate/community-land-trusts-gentrification.html">community land trusts</a>, where a nonprofit buys and holds land title to keep land costs down; and <a href="https://fortune.com/2023/04/08/residents-buying-mobile-home-parks-preserving-affordable-housing-option-low-income-americans/">resident-owned mobile home parks</a>, where residents jointly buy the land. All of these strategies help communities keep housing affordable and avoid displacement. </p>
<p>Shifting away from a business-as-usual development model won’t be easy. But our study shows that Florida, with its flat topography and thousands of miles of coastline, faces cascading fiscal impacts if it continues down its current path.</p><img src="https://counter.theconversation.com/content/211482/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Linda Shi receives funding from the National Oceanographic and Atmospheric Administration. </span></em></p><p class="fine-print"><em><span>Tisha Joseph Holmes received funding from the Florida Department of Environmental Protection, the Robert Wood Johnson Foundation and the Center for Disease Control and Provention. She is affiliated with REfire Culinary. </span></em></p><p class="fine-print"><em><span>William Butler received funding from the Florida Department of Environmental Protection in support of this research. </span></em></p>
A new study of Florida’s fiscal vulnerability to climate change finds that flooding directly threatens many local tax bases.
Linda Shi, Assistant Professor of City and Regional Planning, Cornell University
Tisha Joseph Holmes, Associate Professor of Urban and Regional Planning, Florida State University
William Butler, Associate Professor of Urban and Regional Planning, Florida State University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/213346
2023-09-12T06:23:01Z
2023-09-12T06:23:01Z
How Qantas might have done all Australians a favour by making refunds so hard to get
<p>I’m not sure whether I’ve got any unclaimed Qantas flight credits. </p>
<p>I haven’t looked, either because I’m too busy or can’t be bothered. Which is exactly what Qantas wants. And not only Qantas. Separating out those people who are desperate or determined to get their money from those who give up is a standard business practice.</p>
<p>It’s called <a href="https://www.investopedia.com/terms/p/price_discrimination.asp">price discrimination</a>, although Qantas appears to have added a twist.</p>
<p><a href="https://www.haier.com.au/promotions/2023/upto-150-cashback-laundry">Washing machine</a>, <a href="https://www.lg.com/au/promotions/fridge-cashback-23">fridge</a> and <a href="https://www.umart.com.au/promotions/609">computer</a> manufacturers all do it. They sell their products for a standard price, and then offer a $200 or $400 “cash back” to buyers who fill in and send off a form when they get home.</p>
<p>The manufacturers know time-poor, lazy or well-off customers won’t bother, so they won’t need to send them cash. But the customers who do bother will really need the cash, and probably wouldn’t buy the products without it.</p>
<p>That way they can sell to people who otherwise wouldn’t have bought, while at the same time charging a high price to people prepared to pay it. They’ve arranged things so the two groups sort themselves out.</p>
<h2>A tax on the time-poor</h2>
<p>Qantas (and Virgin) could have easily refunded money to people who bought flights during the first years of COVID and had to cancel because of lockdowns. In most cases, Qantas had their credit card numbers. It still has them. It could refund the best part of <a href="https://www.afr.com/rear-window/qantas-grand-theft-klepto-20230829-p5e0g8">A$500 million</a> right now.</p>
<p>Instead, it makes it really difficult to get money back. It requires phone calls, waiting on the line and fishing out old emails and customer codes. </p>
<p>For a while, until it <a href="https://www.dailymail.co.uk/news/article-12463715/Qantas-flight-credit-Airline-makes-staggering-backdown-victory-customer-owed-refunds-credit.html">backed down</a> days ahead of its chief executive bringing <a href="https://theconversation.com/qantas-chief-alan-joyce-quits-early-amid-customer-fury-at-the-airline-212845">forward his retirement</a>, Qantas said those credits would expire unless they were reclaimed, knowing full well many would not be.</p>
<p>But it’s not only Qantas imposing a tax on the time-poor.</p>
<h2>A tax on those who won’t pick up the phone</h2>
<p>News Corporation will allow you to subscribe to its papers with a click and a card. But when you hit “<a href="https://www.newsagencyblog.com.au/2022/11/11/news-corp-makes-it-so-difficult-to-cancel-a-subscription-to-the-australian-that-some-are-bound-to-give-up/">unsubscribe</a>”, you get given a phone number. </p>
<p>When (and if) you get around to ringing it, you are subjected to an ordeal in which the operator gives you reason after reason not to unsubscribe, instead of acting on your request. You can insist, of course, but it takes time and effort.</p>
<p>The (NewsCorp-owned) Wall Street Journal also makes it impossible to unsubscribe without a phone call… unless you live in <a href="https://clocr.com/blogs/social-media-will/cancel-wall-street-journal-subscription/">California</a>. There, and only there – not in Australia, not in the rest of the United States – you are allowed to unsubscribe online because of a law <a href="https://www.cnet.com/tech/services-and-software/companies-must-let-customers-cancel-subscriptions-online-california-law-says/">forcing</a> providers to offer the option.</p>
<p>Australia’s banks are experts at separating lazy customers from diligent shoppers, as are electricity companies.</p>
<p>They routinely offer customers who switch (or say they are about to switch) <a href="https://theconversation.com/see-when-australias-biggest-banks-stopped-paying-proper-interest-on-your-savings-and-what-you-can-do-about-it-200265">better</a> rates than customers who stay, turning a time-poor tax into a <a href="https://www.etax.com.au/loyalty-tax-what-is-it-and-how-to-avoid-paying-it/">loyalty tax</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/when-the-price-is-not-right-technology-price-gouging-in-australia-10582">When the price is not right: technology price gouging in Australia</a>
</strong>
</em>
</p>
<hr>
<h2>A tax on loyal customers</h2>
<p>You might think a tax on those who don’t chase the best deals is effectively a tax on the better-off, as they are the least likely to need savings. </p>
<p>Yet an array of evidence across a wide range of industries assembled by David Byrne and Leslie Martin finds loyalty taxes hit <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3773860">the poorest</a> the hardest.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=967&fit=crop&dpr=1 600w, https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=967&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=967&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1215&fit=crop&dpr=1 754w, https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1215&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/547702/original/file-20230912-9241-dkcdd3.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1215&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Byrne and Martin set up a call centre inside Melbourne University.</span>
<span class="attribution"><a class="source" href="https://www.pexels.com/photo/a-man-in-white-long-sleeves-sitting-in-front-of-a-computer-5453817/">Pexels</a></span>
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<p>In an intriguing and expensive experiment in 2017, Byrne and Martin attempted to find out why this was.</p>
<p>They staffed a <a href="https://academic.oup.com/qje/article/137/4/2499/6570715">call centre</a> at The University of Melbourne, in which actors phoned electricity companies, provided or let slip a few details, and said they were thinking of switching.</p>
<p>Among those details was eligibility for Victoria’s low-income energy subsidy. </p>
<p>Byrne and Martin found no discrimination against low-income callers <em>because</em> they said they had low incomes. But they did find that where the callers sounded as if they lacked information, they were presented with worse offers.</p>
<h2>A premium price dispute</h2>
<p>Disturbing evidence tendered in the Federal Court suggests some Australian insurance companies may be systematising discrimination against Australians who lack access to information.</p>
<p>The Australian Securities and Investments Commission has alleged some insurers set premiums not only on the basis of risk, but also on the basis of what a computer model tells them about the likelihood of each customer tolerating a price hike.</p>
<p>ASIC says the alleged practice is known internally as “<a href="https://www.afr.com/companies/financial-services/the-allegedly-sly-algorithm-targeting-loyal-insurance-clients-20230831-p5e11v">renewal optimisation</a>”.</p>
<p>Those claims are <a href="https://www.afr.com/companies/financial-services/the-allegedly-sly-algorithm-targeting-loyal-insurance-clients-20230831-p5e11v">disputed</a>, with insurer IAG telling The Australian Financial Review: “We don’t agree with how ASIC has characterised the process by which we calculate renewal premiums, and the impact on our customers.”</p>
<h2>Enough for a government inquiry</h2>
<p>Where immorality starts and standard business practice stops will be a question for a newly-established taskforce on competition. It will be headed by the Grattan Institute’s <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/appointment-productivity-commission-chair">Danielle Wood</a> (who will also head the Productivity Commission) and the former head of the Competition and Consumer Commission, <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/more-dynamic-and-competitive-economy">Rod Sims</a>.</p>
<p>One thing they might be able to agree on immediately is that something else Qantas has been accused of doing with flight credits is beyond the pale. </p>
<p><a href="https://www.abc.net.au/news/2022-02-14/qantas-flight-credit-policy-customer-complaints-covid/100824816">Evidence supplied to the ABC</a> in 2022 suggests that not only has Qantas been hanging on to customers’ money by directing them to use credits for flights rather than refunds, it has been jacking up the price of flights when they do – by 50% to 300%, imposing what amounts to an extra (enforced) loyalty tax.</p>
<p>If Qantas and others have taken standard business practices just that little bit further in recent years, there’s a small chance they’ve done us a favour. They’ve given the taskforce something to sink its teeth into.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/booking-customers-on-cancelled-flights-how-could-qantas-do-that-212793">Booking customers on cancelled flights – how could Qantas do that?</a>
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</em>
</p>
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<img src="https://counter.theconversation.com/content/213346/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Price discrimination is charging customers who don’t mind paying more than those who do – and businesses do it all the time. But Qantas seems to have taken it to a new level.
Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/212183
2023-09-07T07:15:46Z
2023-09-07T07:15:46Z
Life insurers can charge more or decline cover based on your genetic test results. New laws must change this
<figure><img src="https://images.theconversation.com/files/546781/original/file-20230907-25-43r0xc.jpg?ixlib=rb-1.1.0&rect=9%2C133%2C6361%2C4107&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/head-shot-stressed-young-woman-holding-1667439796">Shutterstock</a></span></figcaption></figure><p>Genetic tests can provide life-saving information. They can help diagnose disease, enable access to preventive care, prompt early screening and treatment, and guide patients’ therapeutic options. </p>
<p>In Australia, life insurance companies can legally use the results of genetic tests to discriminate. They can decline to provide life insurance coverage, increase the cost of premiums, or place exclusions on an individual’s cover. This is known as “genetic discrimination”.</p>
<p>This week, a number of <a href="https://www.aph.gov.au/News_and_Events/Watch_Read_Listen/ParlView/video/1695787">federal parliamentarians argued for a ban</a> on genetic discrimination by life insurance companies. This follows <a href="https://doi.org/10.26180/23564538">recommendations</a> from our research team for <a href="https://www.mja.com.au/journal/2021/214/4/monitoring-genetic-testing-and-life-insurance-moratorium-australia-national">legislative reform</a> so Australians don’t forego important genetic tests for fear of this discrimination. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australians-need-more-protection-against-genetic-discrimination-health-experts-168563">Australians need more protection against genetic discrimination: health experts</a>
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<h2>Why would you have a genetic test?</h2>
<p>We don’t choose our genetic risk factors. They exist from birth, can’t be changed, and are often passed down from parents to children, causing generations of disease. </p>
<p>Genetic testing can, in some cases, stop the generational curse of genetic disease through prevention and early intervention. </p>
<p>One of the most well-known examples is testing for changes in the BRCA1 gene – which significantly increases risks of breast, ovarian and prostate cancer. </p>
<p><a href="https://www.nytimes.com/2015/03/24/opinion/angelina-jolie-pitt-diary-of-a-surgery.html">Angelina Jolie</a>, who carries the BRCA1 gene mutation, famously wrote in the New York Times in 2013 about her decision to have surgeries to drastically reduce her chance of developing cancer. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"809185957933154310"}"></div></p>
<h2>How is this discrimination currently allowed?</h2>
<p>The Disability Discrimination Act 1992 (Cth) prohibits discrimination on a number of different bases, including genetic risk factors. </p>
<p>However, there is a specific carve-out in the Act that allows life insurers to discriminate in ways other entities are prohibited from doing. </p>
<p>This means companies providing insurance for death, income protection, and disability can discriminate on the basis of genetic risk of disease. Other companies that provide risk-rated insurance (where insurers assess an individual’s risk factors and change coverage or premiums based on this risk) can also use genetic test results to discriminate. This includes travel insurance. </p>
<p>Health insurance, however, is not risk-rated. This means a health insurer is not allowed to decline cover or change the cost of premiums based on any risk factors, including genetic risk factors. </p>
<h2>Protections are needed</h2>
<p>Fears of insurance discrimination <a href="https://pubmed.ncbi.nlm.nih.gov/28197815/">deter many people</a> from having genetic testing or participating in genetic research. For this reason, numerous other countries <a href="https://www.genevaassociation.org/sites/default/files/ga2017_globalageing_genetics_and_life_insurance_0.pdf">have banned</a> the use of genetic results by insurance companies. </p>
<p>Canada did so in 2017. Its Act prohibits entities (including insurance companies) from collecting or using genetic results to discriminate against individuals. </p>
<figure class="align-center ">
<img alt="Man has blood taken" src="https://images.theconversation.com/files/546784/original/file-20230907-29-xup8ya.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/546784/original/file-20230907-29-xup8ya.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/546784/original/file-20230907-29-xup8ya.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/546784/original/file-20230907-29-xup8ya.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/546784/original/file-20230907-29-xup8ya.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/546784/original/file-20230907-29-xup8ya.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/546784/original/file-20230907-29-xup8ya.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Canadian insurer’s have been prohibited from genetic discrimination since 2017.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-woman-wearing-doctor-uniform-having-2266894075">Shutterstock</a></span>
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<p>Insurance industry bodies frequently raise claims that banning the use of genetic results will increase the cost of premiums, making them unaffordable. </p>
<p>Before the Canadian Act was introduced, its Privacy Commissioner commissioned an <a href="https://www.priv.gc.ca/en/opc-actions-and-decisions/research/explore-privacy-research/2011/gi_macdonald_201107/">actuarial expert</a> and <a href="https://theconversation.com/why-insurers-are-wrong-about-canadas-genetic-non-discrimination-law-81380">economic analyst</a> to consider what impact this ban might have on the Canadian insurance industry. </p>
<p>Both experts concluded the impact of Canada’s ban would be negligible in the medium term, and the Privacy Commissioner <a href="https://www.priv.gc.ca/en/opc-news/news-and-announcements/2017/nr-c_170505/">welcomed the Act</a> as an “important step for privacy and human rights”.</p>
<h2>Genetic testing is likely to expand</h2>
<p>At the moment, only people with a strong personal or family history of certain diseases are eligible for publicly funded genetic testing. </p>
<p>However, research projects such as the <a href="https://dnascreen.monash.edu/">DNA Screen study</a> are piloting <a href="https://www.abc.net.au/radionational/programs/bigideas/dna-screen-testing-disease-cancer-young-population-health/102598372">the offer of</a> DNA screening to the whole population.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/should-i-get-my-dna-tested-we-asked-five-experts-120664">Should I get my DNA tested? We asked five experts</a>
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<hr>
<p>DNA Screen is offering testing to 10,000 young Australians (18-40 year olds) for genetic risk factors for cancer and heart disease, which can be prevented or treated early. </p>
<p>However, we have to tell people when they sign up about potential life insurance discrimination, and many of them change their minds about being part of our study. </p>
<p>As genetic testing offers may expand to the whole population in the future, every person being offered genetic testing will have to consider the implications for their life insurance. </p>
<h2>The long road to legislating protections</h2>
<p>Following <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/LifeInsurance/Report">parliamentary recommendations</a> to ban the use of genetic results by life insurers in 2018, the life insurance industry <a href="https://www.fsc.org.au/resources-category/standard/1779-standard-11-moratorium-on-genetic-tests-in-life-insurance/file">introduced</a> a partial, self-regulated moratorium on using genetic results in 2019. </p>
<p>We had concerns about its terms and the fact that it was self-regulated, with no government oversight. So we <a href="https://www.monash.edu/medicine/a-glimmer/home">gathered views</a> from <a href="https://pubmed.ncbi.nlm.nih.gov/34544841/">health professionals</a>, <a href="https://pubmed.ncbi.nlm.nih.gov/37169978/">consumers</a>, researchers and <a href="https://pubmed.ncbi.nlm.nih.gov/37573782/">financial advisers</a>. </p>
<p>We found the the industry moratorium <a href="https://pubmed.ncbi.nlm.nih.gov/36509687/">did not meet</a> the expectations of the parliamentary recommendations. Overwhelmingly, patients, the general public, health professionals and genetic researchers believed legislation on this issue was required. Our <a href="https://doi.org/10.26180/23564538">final report</a>, released in June, recommends the Australian government introduce a legislative prohibition on the use of genetic test results in insurance underwriting. </p>
<p>This week, federal MP Josh Burns, Chair of the Parliamentary Joint Committee on Human Rights, took the first step by <a href="https://www.aph.gov.au/News_and_Events/Watch_Read_Listen/ParlView/video/1680734">introducing a motion</a>, for the parliament to consider policy reform on this issue. </p>
<p>This was supported by five other federal MPs, including from the coalition and independents. As Labor MP Louise Miller-Frost explained:</p>
<blockquote>
<p>Australians should be able to make these decisions based on their health needs, not financial ones, and we have the opportunity to make that a reality… self-regulation is clearly not sufficient to protect our interests. I believe legislation is required. </p>
</blockquote>
<p>Separate speeches by MP Dr <a href="https://www.linkedin.com/feed/update/urn:li:activity:7104284518328516608/">Daniel Mulino</a> and Assistant Minister for Health and Ageing <a href="https://www.aph.gov.au/News_and_Events/Watch_Read_Listen/ParlView/video/1695787">Ged Kearney</a> this week also supported the motion. </p>
<p>Ms Kearney spoke about several constituents who have shared their concerns about this issue, and also called for <a href="https://www.aph.gov.au/News_and_Events/Watch_Read_Listen/ParlView/video/1695787">policy changes</a>. She noted the benefits for life insurance companies if people can get genetic testing and are able to take preventive action, to become “better risks”. </p>
<p>The Treasury Department, and Stephen Jones MP (Assistant Treasurer and Financial Services Minister) are now considering the appropriate policy solution, together with the Department of Health and Ageing and the Attorney-General’s Department. There is no timeline for this legislation to be introduced, but this urgent policy change must be prioritised by the current government. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/population-dna-testing-for-disease-risk-is-coming-here-are-five-things-to-know-112522">Population DNA testing for disease risk is coming. Here are five things to know</a>
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</em>
</p>
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<img src="https://counter.theconversation.com/content/212183/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jane Tiller received funding from the Commonwealth Government's Genomic Health Futures Fund to complete this research</span></em></p><p class="fine-print"><em><span>Paul Lacaze received funding from the Commonwealth Government's Genomic Health Futures Fund to complete this research.</span></em></p>
Life insurance companies can legally use the results of genetic tests to decline coverage or increase premiums. MPs have called for legislation that bans this practice.
Jane Tiller, Ethical, Legal & Social Adviser - Public Health Genomics, Monash University
Paul Lacaze, Head, Public Health Genomics Program, Monash University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/212309
2023-08-31T12:20:32Z
2023-08-31T12:20:32Z
How to get federal disaster aid: FEMA is running out of money, but these strategies can help survivors of Hurricane Idalia and the Maui fires get aid faster
<figure><img src="https://images.theconversation.com/files/545636/original/file-20230830-17-r1jp9z.jpg?ixlib=rb-1.1.0&rect=1077%2C817%2C1598%2C1064&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hurricane Idalia inundated parts of Tarpon Springs, Fla., and other coastal communities on Aug. 30, 2023.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/makatla-ritchter-wades-through-flood-waters-after-having-to-news-photo/1648494340">Joe Raedle/Getty Images</a></span></figcaption></figure><p>As questions loom over the Federal Emergency Management Agency’s <a href="https://www.cbsnews.com/news/fema-administrator-deanne-criswell-face-the-nation-transcript-08-20-2023/">ability to fund disaster recovery efforts</a>, people whose homes were damaged or destroyed by <a href="https://www.fema.gov/disaster/current">recent wildfires and storms</a> are trying to make their way through the difficult process of securing financial aid.</p>
<p>Residents in communities hit by <a href="https://apnews.com/article/florida-hurricane-idalia-2136985ceea53f5deb600c43aeea1138">Hurricane Idalia</a>, the <a href="https://theconversation.com/after-maui-fires-human-health-risks-linger-in-the-air-water-and-even-surviving-buildings-211404">Maui fires</a> or other recent disasters have a long, tough journey ahead. Early estimates suggest Idalia caused <a href="https://www.moodysanalytics.com/-/media/article/2023/weekly-market-outlook-a-win-for-the-doves.pdf">US$12 billion to $20 billion in losses</a>, primarily in property damage, acccording to Moody’s Analytics. And rebuilding Lahaina, Hawaii, has been forecast at <a href="https://www.mauicounty.gov/CivicAlerts.aspx?AID=12683">over $5.5 billion</a>. </p>
<p>How well the initial disaster response meets residents’ needs has far-reaching consequences for community resilience, especially for <a href="https://theconversation.com/hurricane-damage-harms-the-most-vulnerable-reveals-inequality-and-social-divides-159678">vulnerable residents</a>, as we saw after Hurricanes Katrina and Maria.</p>
<p>I am a <a href="https://engagedscholarship.csuohio.edu/cgi/viewcontent.cgi?article=4215&context=clevstlrev">law professor</a> who focuses on disaster recovery and preparedness and has created several legal clinics to assist survivors. Here’s what anyone facing losses after a federally declared disaster needs to know.</p>
<h2>Declaring a disaster</h2>
<p>The road to recovery starts with state and federal governments <a href="https://www.fema.gov/disaster/how-declared/preliminary-damage-assessments">identifying damages</a> – both property damage and economic damage. These assessments will shape the scope of federal assistance and how resources are allocated for each community and survivor. The level of damage will determine whether the president approves a major <a href="https://www.fema.gov/disaster/how-declared">disaster declaration or simply an emergency declaration</a>.</p>
<p>FEMA created a <a href="https://fema.maps.arcgis.com/home/item.html?id=41177835475243c488bbc55fd1df7c11">survey tool</a>, released in May 2023, to make these assessments more consistent. It is now used by officials to collect information about damage to residences, whether owners or renters live there, and the amount of insurance coverage, among other details. That information is then used to determine the extent of the disaster, its impact on infrastructure and the type of aid needed in the request for a federal disaster declaration.</p>
<figure class="align-center ">
<img alt="A man wearing a T-shirt with the state seal of Hawaii speaks with reporters, standing next to a woman with 'FEMA' on her cap and shirt." src="https://images.theconversation.com/files/545566/original/file-20230830-29-zvfhx8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/545566/original/file-20230830-29-zvfhx8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/545566/original/file-20230830-29-zvfhx8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/545566/original/file-20230830-29-zvfhx8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/545566/original/file-20230830-29-zvfhx8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/545566/original/file-20230830-29-zvfhx8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/545566/original/file-20230830-29-zvfhx8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Hawaii Gov. Josh Green (center) and FEMA Administrator Deanne Criswell (right) speak to reporters in Lahaina on Aug. 12, 2023, while surveying the wildfire damage there.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/HawaiiFires/9468b72bea5f4a03ab897cd9cbaa2830/photo">AP Photo/Rick Bowmer</a></span>
</figcaption>
</figure>
<p>Once the federal government issues an emergency or major disaster declaration, individuals can apply for disaster recovery funding. </p>
<h2>Documenting the damage</h2>
<p>Step 2 is determining individual damages.</p>
<p>Amid the grief and the rush to find temporary housing and rebuild lives, it can be hard to focus on meticulously documenting what was lost and dealing with insurance. But federal aid has relatively short deadlines – people have 30 days from the formal disaster declaration to apply for <a href="https://oui.doleta.gov/unemploy/disaster.asp">disaster unemployment assistance</a> and 60 days for <a href="https://www.fema.gov/assistance/individual/program">individual and household assistance</a>, such as aid for housing, though that deadline is often extended.</p>
<p>As soon as possible, disaster survivors should take photos of the damage and record every affected area of their property. That includes capturing details of damage to structures, personal belongings, vehicles and any medical equipment. This documentation will help provide the evidence for insurance claims, requests for government assistance and potential tax savings.</p>
<figure class="align-center ">
<img alt="A woman wearing shorts, a T-shirt and face mask uses a pitch fork to dig through the ash of a home in Lahaina, Hawaii." src="https://images.theconversation.com/files/545568/original/file-20230830-21-doomuu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/545568/original/file-20230830-21-doomuu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/545568/original/file-20230830-21-doomuu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/545568/original/file-20230830-21-doomuu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/545568/original/file-20230830-21-doomuu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/545568/original/file-20230830-21-doomuu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/545568/original/file-20230830-21-doomuu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Even when everything is gone, as many homeowners discovered in Maui after the fires, there are ways to document the losses.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/HawaiiFires/49f2adaaf293475d931f4b0f2e8bb463/photo">AP Photo/Rick Bowmer</a></span>
</figcaption>
</figure>
<p>The <a href="https://www.irs.gov/newsroom/reconstructing-records-after-a-natural-disaster-or-casualty-loss">Internal Revenue Service</a> has a helpful guide for reconstructing records after catastrophic disasters that destroy everything. Government agencies can recover lost driving records, mortgage records, wills and vehicle sales records. Most of the costs for these searches can be waived after a disaster.</p>
<p>There are other sources, too. Title companies, property tax assessors and real estate brokers will have many documents related to a home’s value and possibly photos. Insurance policies typically list major assets. Credit card companies may have statements showing major purchases. Mobile phones, friends and social media accounts may have more photos of the property.</p>
<p>Keeping records such as repair invoices, receipts, leases, canceled checks and money orders can also help provide an overview of the losses. FEMA recently <a href="https://www.fema.gov/assistance/individual/after-applying/verifying-home-ownership-occupancy">amended its policy</a> to also allow affidavits to prove ownership of homes passed down through generations, known as <a href="https://www.deeds.com/articles/not-entitled-owners-of-heirship-properties-locked-out-of-disaster-relief/">heirship property</a>.</p>
<h2>Finding disaster aid</h2>
<p>People generally have four options for aid: insurance coverage, FEMA benefits, community or nonprofit funding, and private funding, including loans. Navigating this complex landscape can be hard. </p>
<p>Start with your insurance – homeowners insurance, renters insurance and insurance for vehicles, as well as medical, dental and health. Disaster survivors must apply for their relevant insurance payouts before FEMA will pay benefits. President Joe Biden made an exception to this rule to offer a <a href="https://www.fema.gov/press-release/20230817/biden-harris-administration-provides-38-million-assistance-hawaii-residents">one-time $700 payment</a> for Maui residents to assist with critical needs, including shelter and transportation. </p>
<p>In cases where insurance coverage is denied or the person doesn’t have insurance, FEMA can become a lifeline.</p>
<p>FEMA’s <a href="https://www.fema.gov/fact-sheet/understanding-fema-individual-assistance-and-public-assistance">Individual Assistance</a> program offers benefits that include coverage for temporary lodging, home repair, transportation and medical needs. The agency provides <a href="https://www.federalregister.gov/documents/2022/10/25/2022-23162/notice-of-maximum-amount-of-assistance-under-the-individuals-and-households-program">up to $41,000</a> for housing assistance after emergencies or disaster declarations. FEMA’s disaster relief fund is <a href="https://www.fema.gov/sites/default/files/documents/fema_disaster-relief-fund-report_082023.pdf">close to depleted</a>, however, after several <a href="https://www.climate.gov/news-features/blogs/beyond-data/2022-us-billion-dollar-weather-and-climate-disasters-historical">multibillion-dollar</a> disasters. Without <a href="https://www.whitehouse.gov/wp-content/uploads/2023/08/Final-Supplemental-Funding-Request-Letter-and-Technical-Materials.pdf">additional funding</a> from Congress soon, FEMA Administrator Deanne Criswell said some <a href="https://www.cbsnews.com/news/fema-administrator-deanne-criswell-face-the-nation-transcript-08-20-2023/">recovery funding may be delayed</a> to the next fiscal year, which starts in October.</p>
<figure class="align-center ">
<img alt="A man looks out a door that is blocked at the bottom. A sump pump is running next to it. The water is nearly up to the windows." src="https://images.theconversation.com/files/545637/original/file-20230830-29-jiubc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/545637/original/file-20230830-29-jiubc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=407&fit=crop&dpr=1 600w, https://images.theconversation.com/files/545637/original/file-20230830-29-jiubc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=407&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/545637/original/file-20230830-29-jiubc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=407&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/545637/original/file-20230830-29-jiubc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=511&fit=crop&dpr=1 754w, https://images.theconversation.com/files/545637/original/file-20230830-29-jiubc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=511&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/545637/original/file-20230830-29-jiubc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=511&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A store owner uses a sump pump to try to keep Hurricane Idalia’s rain and storm surge from flooding the building in Tarpon Springs, Fla., on Aug. 30, 2023.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/store-owner-uses-a-sump-pump-to-try-to-keep-water-out-of-news-photo/1648905661?adppopup=true">Joe Raedle/Getty Images</a></span>
</figcaption>
</figure>
<p>To cover the costs that go beyond FEMA’s limits, survivors may need to secure private loans or disaster loans, such as <a href="https://disasterloanassistance.sba.gov/ela/s/">Small Business Administration disaster loans</a>, to bridge the gap. Homeowners can apply for SBA loans to <a href="https://disasterloanassistance.sba.gov/ela/s/article/Home-and-Personal-Property-Loans">replace or repair their primary residence</a> or personal property, including cars, furniture and other items. Additionally, SBA loans can also cover business losses.</p>
<p>For those unwilling or unable to resort to loans, state and local governments often create housing recovery centers using <a href="https://www.hudexchange.info/programs/cdbg-dr/">Community Development Block Grants</a>. These grants can help survivors reestablish housing, but the funding also takes much longer to arrive. A CBDG grant in Baton Rouge provided <a href="https://www.theadvocate.com/louisiana_flood_2016/heres-how-louisiana-programs-aim-to-rebuild-thousands-of-flooded-rentals-get-owners-over-the/article_8d7bead0-52c8-11e7-99ff-cb4057db2000.html">funding for rebuilding housing</a> and to mitigate future flood damage in housing and rental programs after the area flooded in 2016.</p>
<h2>Community partnerships are crucial</h2>
<p>Amid the complexities of disaster recovery, the importance of community planning and collaboration cannot be overstated.</p>
<p>A coordinated approach that involves local governments, relief organizations and community leaders serves as a catalyst for effective recovery and also makes it easier to identify vulnerable populations and ensure the equitable distribution of resources so no one is left behind. </p>
<p>Communities often set up centers where residents can find and speak to advisers from insurance companies, FEMA and other sources of support. These disaster recovery centers can be the cornerstone for long-term recovery groups that help a community both recover and build resilience.</p>
<p><a href="https://abcnews.go.com/US/groups-helping-puerto-rico-hurricane-fiona/story?id=90151121">Five years after Hurricane Maria</a>, community groups were still on the ground in Puerto Rico providing aid and resources to the local community. <a href="https://matadornetwork.com/pulse/hurricane-katrina-orgs-working-equitable-new-orleans/">Ten years after Hurricane Katrina</a>, local housing groups were still providing support to New Orleans residents, especially those employed in the hospitality industry.</p>
<p>In the midst of this formidable journey to recovery, the indomitable spirit of communities banding together, combined with the concerted efforts of government agencies and organizations, can be uplifting. Each step forward represents a collective stride toward healing, renewal and a future marked by greater unity.</p>
<p><em>This articled was updated Sept. 1, 2023, with early damage estimates.</em></p><img src="https://counter.theconversation.com/content/212309/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Latisha Nixon-Jones does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
An expert in disaster law explains the steps for securing aid, what to do if everything is lost and the deadlines to watch.
Latisha Nixon-Jones, Associate Professor of Law, Jacksonville University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/211515
2023-08-17T20:10:27Z
2023-08-17T20:10:27Z
Home insurance bills are soaring as climate risks grow. The government should step in
<p>The <a href="https://www.actuaries.asn.au/public-policy-and-media/thought-leadership/green-papers/home-insurance-affordability-update-and-funding-costs-for-floods/">Actuaries Institute of Austalia</a> has just confirmed what many Australian households already know – home insurance is increasingly unaffordable.</p>
<p>It found average premiums climbed 28% in the year to March, while premiums for higher-risk properties, such as those in flood-prone areas, climbed 50%.</p>
<p>The institute also found 12% of Australian households – 1.24 million – are experiencing extreme home insurance affordability stress, defined as paying more than four weeks of gross household income on premiums. </p>
<p>Twelve months ago, this figure was 10%, or 1 million households.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=968&fit=crop&dpr=1 600w, https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=968&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=968&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1216&fit=crop&dpr=1 754w, https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1216&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/543139/original/file-20230817-29-7snpd3.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1216&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.actuaries.asn.au/public-policy-and-media/thought-leadership/green-papers/home-insurance-affordability-update-and-funding-costs-for-floods/">Actuaries Institute of Australia</a></span>
</figcaption>
</figure>
<p>While in the past affordability had been recognised as a problem affecting vulnerable Australians, it has got to the point where it is hitting households across the socio-economic spectrum. And not only in Australia. </p>
<p>Insurers are increasing premiums in locations at high risk of climate-related damage throughout the world and even withdrawing home insurance completely in places such as California and Florida.</p>
<p>The high premiums are spreading to households in lower-risk locations through a complex interconnected system of rising private <a href="https://www.ft.com/content/7ad831a7-801d-47e7-9158-4e832b798bb0?shareType=nongift">reinsurance</a> charges (insurance for insurers), more frequent and worse weather events, and increasing rebuilding costs. </p>
<h2>The case for a government-owned reinsurance pool</h2>
<p>The Actuaries Institute put forward <a href="https://www.actuaries.asn.au/Library/Opinion/2023/REPORTFLOODCOSTS.pdf">risk pooling</a> as an emergency solution. </p>
<p>It would work through a government-owned and run “reinsurance pool”, providing nationwide coverage for claims relating to extreme weather events. Private insurers would pass on their risk to the state-owned pool, which would use the pooled premiums to ensure every insurer was covered.</p>
<p>In the past, the insurance industry has been overwhelmingly opposed to the idea, viewing it as interfering in a traditionally private market. </p>
<p>As recently as March 2022, as Queensland and NSW reeled in the aftermath of catastrophic flooding and its <a href="https://www.afr.com/companies/financial-services/quadruple-storm-flood-whammy-for-insurer-suncorp-20220316-p5a51m">implications for insurance</a>, the Insurance Council of Australia responded to calls to extend the newly created <a href="https://treasury.gov.au/consultation/c2021-226351">cyclone reinsurance pool</a> by saying the private sector <a href="https://www.insurancenews.com.au/analysis/shallow-solution-do-floods-expose-pool-limitations">did things better</a>.</p>
<p>The industry’s concerns are not totally unfounded. Setting up a risk pool without taking steps to mitigate the underlying risk would simply mask, or even exacerbate, the problem. It could facilitate insurance and rebuilding in high-risk areas that will suffer repeated losses. </p>
<p>Risk pools have to include mechanisms that tie insurability to long-term risk reduction through mitigation, updated planning and building regulations, and disaster-resilient rebuilding programs, informed by nationwide data collection.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/victims-of-nsw-and-queensland-floods-have-lodged-60-000-claims-but-too-many-are-underinsured-heres-a-better-way-178294">Victims of NSW and Queensland floods have lodged 60,000 claims, but too many are underinsured. Here's a better way</a>
</strong>
</em>
</p>
<hr>
<h2>Governments are stepping in elsewhere</h2>
<p>Extreme weather risk pools work in advanced economies around the world. </p>
<p>Some, such as the United States’ <a href="http://cup.columbia.edu/book/underwater/9780231190275">National Flood Insurance Program</a>, mask risk while allowing rebuilding in disaster-prone areas. But others, such as those in <a href="https://fdslive.oup.com/www.oup.com/academic/pdf/openaccess/9780192865168.pdf">Spain</a>, <a href="https://www.ccr.fr/en/activites/reassurances-et-fonds-publics/catastrophes-naturelles">France</a> and <a href="https://www.vkg.ch/media/2358/bericht_elementarschadenversicherung_schweiz_en.pdf">Switzerland</a>, integrate risk pooling with risk reduction.</p>
<p>Australia would need to draw on the experience of the countries that do it well, doing everything we can to reduce underlying risk, including by changing where and how we build, and relocating people from disaster-prone areas.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/after-the-floods-comes-underinsurance-we-need-a-better-plan-178143">After the floods comes underinsurance: we need a better plan</a>
</strong>
</em>
</p>
<hr>
<p>If we don’t do something along the lines of government-provided and mandated reinsurance, insurance and its enormous benefits will no longer be available to an increasing share of Australians, regardless of their financial means. </p>
<p>The <a href="https://www.actuaries.asn.au/Library/Opinion/2023/REPORTFLOODCOSTS.pdf">inclusion</a> of the idea in the Actuaries Institute report might be an indication that opposition is softening. The future of home insurance could depend on it.</p><img src="https://counter.theconversation.com/content/211515/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>In the past Paula Jarzabkowski has received funding to study insurance protections gaps from Australian Reinsurance Pool Corporation (ARPC), the Bank of England, Flood Re, Guy Carpenter, Hiscox, the International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP), the Leverhulme Trust, Pool Re, Präventionsstiftung der Kantonalen
Gebäudeversicherungen and Willis Towers Watson. She is a member of the OECD High-Level Advisory Board for the Financial Management of Catastrophe Risk and on the Pool Re Advisory Council.</span></em></p><p class="fine-print"><em><span>Corinne Unger and Katie Meissner do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
With average insurance premiums up 28% in the past year, there’s growing pressure on the insurance industry to rethink its opposition to a government-owned and run disaster reinsurance pool.
Paula Jarzabkowski, Professor in Strategic Management, The University of Queensland
Corinne Unger, Postdoctoral Research Fellow, The University of Queensland
Katie Meissner, Postdoctoral Research Fellow, The University of Queensland
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/211393
2023-08-11T12:39:08Z
2023-08-11T12:39:08Z
Wildfires are a severe blow to Maui’s tourism-based economy, but other iconic destinations have come back from similar disasters
<figure><img src="https://images.theconversation.com/files/542235/original/file-20230810-19-tqcvzx.jpg?ixlib=rb-1.1.0&rect=61%2C24%2C8181%2C5450&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Destroyed homes and buildings in Lahaina on Aug. 10, 2023, in the aftermath of wildfires on western Maui, Hawaii.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/an-aerial-image-taken-on-august-10-2023-shows-destroyed-news-photo/1590312358">Patrick T. Fallon / AFP via Getty Images</a></span></figcaption></figure><p><em>Major wildfires on the Hawaiian island of Maui have <a href="https://www.facebook.com/countyofmaui/posts/pfbid0PKT2oPbjEdM7bAQM2JtEGeCSd7rumG3yQ7YbFcQ95pnnzyYHBDFLNrPBFPGTDz7Jl">killed dozens of people</a> and caused heavy damage, particularly in the historic town of Lahaina, as of Aug. 10, 2023. The state has <a href="https://beatofhawaii.com/hawaii-asks-all-visitors-to-leave-maui/">asked all visitors to leave Maui</a> and those planning to travel there to reschedule their trips – a harsh blow to a destination whose economy relies heavily on tourism. University of South Carolina research professor <a href="https://scholar.google.com/citations?user=-sW8SYIAAAAJ&hl=en">Rich Harrill</a>, an expert on hospitality and tourism, explains how such events affect places like Maui in the short and long terms.</em></p>
<h2>How tourism-dependent is Hawaii compared to other popular destinations?</h2>
<p>Compared to other destinations, Hawaii is very reliant on tourism – it comprises <a href="https://seagrant.soest.hawaii.edu/rebooting-hawaiis-visitor-industry/">about 25% of the state’s economy</a>. According to the Hawaii Department of Business, Economic Development & Tourism, <a href="https://dbedt.hawaii.gov/blog/23-24/#">visitor spending</a> was projected to be US$20.8 billion in 2023 and $23.4 billion in 2026.</p>
<p>Tourism plays an even greater role on Maui. Maui County has the state’s <a href="https://www.hawaiitourismauthority.org/media/5414/maui-county-tourism-industry-stragetic-plan-volume-1.pdf">highest reliance on tourism</a>, with 51% of its jobs falling into sectors directly associated with tourism. That means household incomes and purchasing power there are strongly influenced by the tourism economy.</p>
<h2>What are the main steps that tourist-related businesses on Maui will have to take in the coming days and weeks?</h2>
<p>The first step any business owner should take is to ensure that their business opens in line with all state protocols and laws related to the safety, health and welfare of residents and visitors. </p>
<p>In the short term, the top priorities are helping visitors get flights home, handling cancellations and assessing damage to facilities and property. Then, in the weeks that follow, businesses will clean up and make repairs. They will have various aid sources, including the county, state and federal governments, nonprofits and private insurers.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="People standing, sitting and lying down around an airport departure gate." src="https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/542236/original/file-20230810-25-virl9m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Passengers crowd a terminal at Kahului Airport, waiting for delayed and canceled flights off Maui after wildfires, on Aug. 9, 2023.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/passengers-try-to-rest-and-sleep-after-canceled-and-delayed-news-photo/1589107233">Patrick T. Fallon/AFP via Getty Images</a></span>
</figcaption>
</figure>
<p>As we saw during the <a href="https://www.theguardian.com/us-news/2020/jul/26/hawaii-coronavirus-tourism-economy-impact">COVID-19 shutdowns</a>, downtime can give business owners an opportunity to <a href="https://www.nytimes.com/2021/03/07/travel/hawaii-covid-tourism.html">reflect on their product or service and how they market it</a>. Some business owners decided to close up shop and retire. Others redoubled their efforts to accommodate the <a href="https://dbedt.hawaii.gov/blog/23-18/">post-pandemic rebound</a> in visitor demand.</p>
<h2>Maui is asking visitors to leave and to delay planned trips – will a lot of tourism-related jobs be lost?</h2>
<p>Individual businesses and corporations may offer some types of worker protection. But historically, many jobs in the tourist sector get cut in the short term when a crisis shuts down business. Then, as conditions improve, companies gradually hire employees back. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/75atiYAMcaE?wmode=transparent&start=3" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Hawaii has weathered other major disasters, including Hurricane Iniki, which devastated the island of Kauai in September 1992.</span></figcaption>
</figure>
<h2>How do local governments decide when to start inviting visitors back?</h2>
<p>This is a process that’s led by groups known in the travel industry as <a href="https://www.travelweekly.com/Travel-News/Government/destination-marketing-organizations-From-marketing-to-managing">destination marketing and management organizations</a>. They often have names like tourist boards, or convention and visitors bureaus, and they help promote and market local attractions.</p>
<p>Working with their local destination marketing organization, local governments should make decisions carefully about inviting visitors back. First and foremost, they need to consider the health, safety and welfare of everyone who’s involved – residents, visitors and hospitality providers. All of those groups should be involved in the decision, and it needs to be communicated through carefully crafted marketing messages to reach globally diverse audiences. </p>
<p>Once the needs of the community and its residents have been met, a new marketing campaign takes place that typically presents a revitalized destination that is open and ready for visitors. This message may emphasize new and improved aspects of the destination, or simply show that its beloved and iconic qualities are still there to enjoy. That includes making sure that transportation is available to reach the destination and that there’s quality lodging and dining readily available for all price points. </p>
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<h2>In your experience, does interest in top destinations like Hawaii usually bounce back to pre-disaster levels?</h2>
<p>Globally, tourism revenues are projected to grow by <a href="https://www.statista.com/outlook/mmo/travel-tourism/worldwide">almost 5% yearly through 2027</a>. Unlike other forms of economic development, travel and tourism have shown resilience through many different types of crises. </p>
<p>Even destinations that have been massively damaged can regain their markets, although rebuilding may be a multi-year process. New Orleans was a major destination <a href="https://www.cnbc.com/2015/08/28/new-orleans-tourism-booms-10-years-after-hurricane-katrina.html">within a decade</a> after it was flooded by Hurricane Katrina. The same was true for the <a href="https://www.hawaiinewsnow.com/story/19516425/hurricane-iniki-kauais-road-to-recovery/">Hawaiian island of Kauai</a> after Hurricane Iniki ravaged it in 1992.</p>
<p>Tourism is a experience that is unique to the human condition. It sustains our hopes and dreams, and offers relaxation and tranquility, or excitement and adventure, through good times and bad.</p><img src="https://counter.theconversation.com/content/211393/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rich Harrill has collaborated with the U.S. Travel Association and the U.S. Department of Commerce's Office of Travel and Tourism Industries. He has received grants from more than 30 different government, business and industry clients, and has produced strategic tourism plans and development studies for multiple counties in South Carolina.</span></em></p>
Wildfires on Maui are a crippling blow to the island’s tourism industry, which generates half of its jobs. But New Orleans and Kauai show that comebacks are possible.
Rich Harrill, Research Professor of Hospitality and Tourism and Director, International Tourism Research Institute, University of South Carolina
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/210663
2023-08-10T12:25:02Z
2023-08-10T12:25:02Z
AI threatens to add to the growing wave of fraud but is also helping tackle it
<figure><img src="https://images.theconversation.com/files/541723/original/file-20230808-19-q8t3ng.jpg?ixlib=rb-1.1.0&rect=0%2C24%2C5452%2C3812&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government, banks and other financial organisations are now dealing with fraud by using increasingly sophisticated detection methods.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/internet-fraud-darknet-data-thiefs-cybercrime-1716862513">Maksim Shmeljov/Shutterstock</a></span></figcaption></figure><p>There were <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/articles/natureoffraudandcomputermisuseinenglandandwales/yearendingmarch2022">4.5 million</a> reported incidents of fraud in the UK in 2021/22, up 25% on the year before. It is a growing problem which costs billions of pounds every year. </p>
<p>The COVID pandemic and the cost of living crisis have created <a href="https://www.bbc.co.uk/news/business-55769991">ideal conditions</a> for fraudsters to exploit the vulnerability and desperation of many households and businesses. And with the use of AI increasing in general, we will likely see a further increase in <a href="https://www2.deloitte.com/uk/en/blog/auditandassurance/2023/generative-ai-and-fraud-what-are-the-risks-that-firms-face.html">new types of fraud</a> and is probably contributing to the increased frequency of fraud we are seeing today. </p>
<p>Already, the ability of AI to absorb personal data, such as emails, photographs, videos and <a href="https://www.cbsnews.com/news/scammers-ai-mimic-voices-loved-ones-in-distress/#:%7E:text=Artificial%20intelligence%20is%20making%20phone,mounting%20losses%20due%20to%20fraud.">voice recordings</a> to imitate people is proving to be a new and unprecedented challenge. </p>
<p>But there is also an upside. The government, banks and other financial organisations are now fighting back with increasingly sophisticated fraud-detection methods. AI and machine learning models could be a <a href="https://www.weforum.org/agenda/2023/04/as-generative-ai-gains-pace-industry-leaders-explain-how-to-make-it-a-force-for-good/">part of the solution</a> to deal with the increasing complexity, sophistication and prevalence of such scams.</p>
<p>The rising gap between prices and people’s incomes appears to have made people more <a href="https://www.citizensadvice.org.uk/about-us/about-us1/media/press-releases/over-40-million-targeted-by-scammers-as-the-cost-of-living-crisis-bites/">receptive</a> to scams which offer grants, rebates and support payments. </p>
<p>Fraudsters often target individuals by posing as genuine organisations. Examples include pretending to be your bank or posing as the government telling you that you are eligible for a lucrative scheme, in order to steal your identity details and then money. </p>
<p>This follows a dramatic rise in recent years of fraudulent applications to government and regional support packages, mainly implemented in response to the pandemic. Here fraudsters often pose as fake businesses to secure multiple loans or grants. </p>
<p>One of the <a href="https://www.manchestereveningnews.co.uk/news/greater-manchester-news/man-who-pretended-greggs-bakery-27251086">most outlandish examples</a> of this was a Luton man who posed as a Greggs bakery to swindle three local authorities in England out of almost £200,000 worth of COVID small business grants.</p>
<p>The hurried roll out of such schemes for faster economic impact made it difficult for officials to effectively review applications. The UK government’s Department for Business and Trade now <a href="https://www.bbc.co.uk/news/business-59504943">estimates</a> that 11% of such loans, roughly £5 billion, were fraudulent. By March 2022 only £762 million <a href="https://www.gov.uk/government/publications/hmrc-issue-briefing-tackling-error-and-fraud-in-the-covid-19-support-schemes/tackling-error-and-fraud-in-the-covid-19-support-schemes">had been recovered</a>.</p>
<h2>Fraud detection</h2>
<p>Over the past few years, complex mathematical models combining traditional statistical techniques and machine learning analysis have shown promise in the <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/acfi.12742">early detection</a> of financial statement fraud. This is when companies typically misrepresent or deceive investors into believing they are more profitable than they really are.</p>
<p>One of the breakthroughs has been the incorporation of both financial and non-financial information into data analysis systems. For example, the risk of fraud decreases if there is <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/acfi.12742">better corporate governance</a> and a lower proportion of directors who are also executives. </p>
<p>In a small business context, we can think about this as promoting transparency and making sure that important positions do not have sole authority to make significant decisions. </p>
<p>Such data analytics models can be used to rank applications in terms of potential fraud risk, so that the riskiest applications get additional scrutiny by government officials. We are now starting to see implementations of such systems to tackle <a href="https://www.theguardian.com/society/2023/jul/11/use-of-artificial-intelligence-widened-to-assess-universal-credit-applications-and-tackle">universal credit</a> fraud, for example.</p>
<p><a href="https://www.ft.com/content/0dca8946-05c8-11e8-9e12-af73e8db3c71">Banks, financial services providers</a> and <a href="https://www.ft.com/content/d3bd46cb-75d4-40ff-a0cd-6d7f33d58d7f">insurers</a> are developing machine-learning models to detect financial fraud too. A Bank of England survey published in October 2022 <a href="https://www.bankofengland.co.uk/report/2022/machine-learning-in-uk-financial-services">revealed</a> that 72% of financial services firms are already testing and implementing them. </p>
<p>We are also seeing new collaborations in the industry, with the likes of Deutsche Bank partnering with chip maker Nvidia to <a href="https://www.db.com/news/detail/20221207-deutsche-bank-partners-with-nvidia-to-embed-ai-into-financial-services">embed AI</a> into their fraud detection systems.</p>
<h2>Risks of AI systems</h2>
<p>However, the advent of new automated AI systems bring with it worries of potential unintended biases within them. In a <a href="https://www.bbc.co.uk/news/uk-politics-66133665">recent trial</a> of a new AI fraud detection system by the Department of Work and Pensions, campaign groups were worried about potential biases. </p>
<p>A common issue that needs to be overcome with such systems is that they work for the majority of people, but are often biased against minority groups. This means if left unadjusted they are disproportionately more likely to flag applications from ethnic minorities as risky.</p>
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Read more:
<a href="https://theconversation.com/scams-deepfake-porn-and-romance-bots-advanced-ai-is-exciting-but-incredibly-dangerous-in-criminals-hands-199004">Scams, deepfake porn and romance bots: advanced AI is exciting, but incredibly dangerous in criminals' hands</a>
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<p>But AI systems should not be used as a fully automated process to detect and accuse fraud but rather <a href="https://www.ft.com/content/2df33fc5-981a-4952-8dc6-d4eee7343acc">as a tool</a> to assist assessors. They can help auditors and civil servants, for example, to identify cases where greater scrutiny is required and to reduce processing time.</p><img src="https://counter.theconversation.com/content/210663/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adrian Gepp has received funding from the Accounting and Finance Association of Australia and New Zealand. He is also affiliated with the Association of Certified Fraud Examiners. </span></em></p><p class="fine-print"><em><span>Laurence Jones does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Fraud was up 25% in the UK in 2021/22.
Laurence Jones, Lecturer in Finance, Bangor University
Adrian Gepp, Professor of Data Analytics, Bangor University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/210083
2023-08-07T13:59:23Z
2023-08-07T13:59:23Z
How to build financial resilience: insurance and retirement savings are the most effective tools in South Africa – study
<figure><img src="https://images.theconversation.com/files/540162/original/file-20230731-248519-drtf0d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Employment and education increase financial resilience.</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>Imagine you’ve found yourself in a difficult financial situation and needed to raise R40,000 (more than US$2,000) on the spot. Where and how would you raise these funds? Or what if a financial emergency has just taken a grip of your household? Which resources would you draw upon to address the problem?</p>
<p>If these scenarios ring true, you’re not alone. Many households are struggling to cope with unexpected financial expenses as interest rates and costs of living rise. With the global economy recovering from the impact of the COVID-19 pandemic, <a href="https://www.worldbank.org/en/publication/wdr2022/brief/chapter-1-introduction-the-economic-impacts-of-the-covid-19-crisis">developing countries</a> have been worse off. As many as <a href="https://openknowledge.worldbank.org/entities/publication/a40366b3-55db-51f2-95e6-14dffb1ce744">64% of households</a> reported a decrease in income. And South Africa was no exception.</p>
<p>A <a href="https://www2.deloitte.com/za/en/pages/consumer-industrial-products/articles/state-of-the-south-african-consumer.html">recent study</a> found that 61% of South Africans were financially stressed and struggled to meet their basic financial commitments due to a shortage of money. Further, close to 40% of respondents believed that their financial situation had worsened since 2022. </p>
<p>This points to a need for financial resilience.</p>
<p>Financial resilience is the ability to withstand and recover from financial shocks, such as an unexpected expense in a time of crisis. To understand the state of financial resilience, and the financial resources that build financial resilience, <a href="https://www.emerald.com/insight/content/doi/10.1108/IJBM-01-2023-0053/full/html?skipTracking=true">we studied</a> a nationally representative sample of 4,880 South African households across nine provinces.</p>
<p>We have been researching financial planning in South Africa and are interested in the gender dynamics in household savings. Our research found that women were, in general, more likely than men to be financially vulnerable. We also found that insurance and retirement savings were the most effective tools for increasing financial resilience.</p>
<h2>Measuring resilience</h2>
<p>We constructed an index to measure financial resilience. It was made up of the availability of savings, insurance, credit and retirement savings. Access to these instruments is a financial safety net that one can rely on in times of need. We considered access to both formal and informal sources of finance for savings, including banks, non-banks, informal savings clubs and savings at home. </p>
<p>We also included in our analysis credit from banks, non-banks, informal credit providers, and family or friends. Insurance encompassed both life and medical insurance. Finally, we examined retirement savings as contributions towards compulsory retirement funds (such as pension or provident funds) and/or voluntary retirement annuity funds.</p>
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Read more:
<a href="https://theconversation.com/retired-women-in-south-africa-carry-a-huge-burden-of-poverty-177379">Retired women in South Africa carry a huge burden of poverty</a>
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<p><a href="https://www.emerald.com/insight/content/doi/10.1108/IJBM-01-2023-0053/full/html?skipTracking=true">Our research</a> also sought to examine the demographic and socioeconomic factors that could explain the differences in the levels of financial resilience between households.</p>
<h2>What we found</h2>
<p>Overall, we found low levels of financial resilience across the sample. Surprisingly, we found that insurance is the greatest contributor to building household financial resilience, followed by retirement provisions, savings and credit. However, we found that a gender gap in financial resilience exists, with men being more financially resilient than women. </p>
<p>We also found that the demographic and socioeconomic characteristics that are common between men and women also differentiate their resources levels in building financial resilience. In other words, some demographic groups have better access to financial products than others. For example, men between the ages of 45 and 59 have the highest levels of financial resilience compared to women across all age groups. Since men have <a href="https://www.statssa.gov.za/?p=14606">higher rates of labour market participation</a> and <a href="https://www.imf.org/en/Publications/fandd/issues/2020/03/africa-gender-gap-access-to-finance-morsy">greater access to financial services</a>, they also accumulate more wealth and have greater financial security.</p>
<p>On the other hand, when race is considered, we found that black and white men were more financially resilient than their female counterparts. White women remained more financially resilient than black women. Black women need to contend with the double burden of race and gender to overcome financial vulnerability.</p>
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Read more:
<a href="https://theconversation.com/91-of-sub-saharan-african-workers-dont-save-for-old-age-why-thats-a-problem-and-how-to-fix-it-204766">91% of sub-Saharan African workers don't save for old age: why that’s a problem and how to fix it</a>
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<p>We also observed a gender gap in financial resilience, in favour of men, across urban and rural areas (such as farming areas and traditional villages). Financial resilience was highest among people residing in urban areas. Households in rural or farming areas tend to be <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/publication/wcms_437194.pdf#page=3">excluded from mainstream financial markets</a>, which makes it difficult to build financial resilience.</p>
<p>We found that access to economic and education opportunities increased financial resilience for women. Women with jobs and those with tertiary education were more financially resilient than their male counterparts. This reiterates the importance of women having independent access to income as it improves their economic bargaining power.</p>
<h2>How to improve resilience</h2>
<p>To improve the ability to withstand financial shocks, a few key interventions are necessary. </p>
<p>First, the uptake of life and medical insurance is strongly connected to financial resilience and can help South African households overcome an unexpected crisis. Further, policies aimed at building reserves in savings and enhancing access to credit facilities among vulnerable households can improve levels of financial resilience and economic security.</p>
<p>Since we also established that retirement provisions are a driver of financial resilience, premature access to retirement savings should be discouraged. Particularly if it’s consumption driven. The new two-pot <a href="https://www.liberty.co.za/media-insights/what-you-need-to-know-about-the-two-pot-retirement-saving-system#:%7E:text=In%20the%20new%20two%20pot,of%20withdrawing%20from%20these%20savings.">retirement saving system</a> – which proposes that a portion of retirement benefits can be withdrawn prematurely – may be helpful in the short term. But it could lead to financial vulnerability during one’s retirement years. </p>
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Read more:
<a href="https://theconversation.com/south-africa-needs-to-be-creative-to-avoid-falling-off-the-retirement-cliff-72825">South Africa needs to be creative to avoid falling off the retirement cliff</a>
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<p>Second, evidence of a gender gap in financial resilience calls for the design of gender-inclusive policies and interventions. More specifically in the access and use of financial services. Current practices of charging higher interest rates to those who are financially excluded typically disadvantages women as they have less access to financial services than men. Eliminating this policy can contribute towards improving access to financial products in a way that’s both gender-neutral and equitable. </p>
<p>In addition, racial and geographic location gaps in financial resilience are underpinned by gaps in access to financial services. This needs to be considered in national policies, such as the <a href="https://www.fsca.co.za/Documents/FSCA%20Financial%20Inclusion%20Strategy.pdf">financial inclusion strategy</a>, with clear targets set for closing such gaps. </p>
<p>Exposure to economic risks, whether anticipated or unexpected, is a reality we must all contend with. The ability to withstand and overcome these risks is a good indicator of financial resilience. Having adequate and equitable access to financial products and services remains the cornerstone of financial resilience.</p><img src="https://counter.theconversation.com/content/210083/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Access to economic and education opportunities increases women’s ability to withstand and recover from financial shocks.
Bomikazi Zeka, Assistant Professor in Finance and Financial Planning, University of Canberra
Abdul Latif Alhassan, Associate Professor in Development Finance & Insurance, University of Cape Town
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/208146
2023-06-23T12:28:57Z
2023-06-23T12:28:57Z
More than 1.5 million Americans lost Medicaid coverage in the spring of 2023 due to the end of pandemic policies – and paperwork problems
<figure><img src="https://images.theconversation.com/files/533251/original/file-20230621-15460-7pdgnh.jpg?ixlib=rb-1.1.0&rect=1802%2C134%2C6377%2C4574&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Medicaid helps millions of low-income Americans get health care.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/sad-girl-having-a-medical-appointment-with-her-royalty-free-image/1448475165?adppopup=true">skynesher/E+ via Getty Images</a></span></figcaption></figure><figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=255&fit=crop&dpr=1 600w, https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=255&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=255&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=321&fit=crop&dpr=1 754w, https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=321&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/533564/original/file-20230622-15-uhh2l7.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=321&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>At least 1.5 million Americans lost Medicaid coverage in <a href="https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-and-unwinding-tracker/">April, May and the first three weeks of June 2023</a>, according to the Kaiser Family Foundation, a nonprofit that tracks health data. </p>
<p>Because only 25 states had publicly reported this data as of June 22, the actual number of people who lost coverage through Medicaid, the government’s main health insurance program for low-income people and people with certain disabilities, is surely much higher.</p>
<p>This swift <a href="https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/">decline in Medicaid enrollment follows a huge increase</a> that started in early 2020 and was brought about by <a href="https://ysph.yale.edu/news-article/3-essential-questions-the-end-of-medicaid-continuous-enrollment/">temporary policy changes</a> in effect for the first three years of the COVID-19 pandemic. During that time, the <a href="https://theconversation.com/medicaid-enrollment-soared-by-25-during-the-covid-19-pandemic-but-a-big-decline-could-happen-soon-190494">federal government didn’t let states</a>, which administer Medicaid, drop anyone from the program – even if their income grew too high to qualify.</p>
<p>As of January 2023, the most recent month for which full data is available, a <a href="https://data.medicaid.gov/dataset/6165f45b-ca93-5bb5-9d06-db29c692a360/data">total of 93 million Americans were insured</a> through either Medicaid or the <a href="https://www.verywellhealth.com/understanding-the-difference-between-medicaid-and-chip-4137934">Children’s Health Insurance Program</a>, known as CHIP, a related program. That marked a 30.7% increase from February 2020.</p>
<p>The federal government has estimated that <a href="https://aspe.hhs.gov/sites/default/files/documents/a892859839a80f8c3b9a1df1fcb79844/aspe-end-mcaid-continuous-coverage.pdf">15 million people will lose their coverage</a>, including 5.3 million children, by mid-2024 due to the end of the continuous enrollment policy.</p>
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<h2>Public health emergency over</h2>
<p>The sharp spike in Medicaid enrollment stopped abruptly because the U.S. <a href="https://theconversation.com/what-does-ending-the-emergency-status-of-the-covid-19-pandemic-in-the-us-mean-in-practice-4-questions-answered-205165">COVID-19 pandemic public health emergency status has expired</a>.</p>
<p>States now must phase out <a href="https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/">their continuous enrollment policies</a>, but they are doing it on different schedules. Some began in April 2023; others started to send out termination letters in May or June. There are also states that will not begin this process until later in the year or <a href="https://www.medicaid.gov/resources-for-states/coronavirus-disease-2019-covid-19/unwinding-and-returning-regular-operations-after-covid-19/covid-19-phe-unwinding-section-1902e14a-waiver-approvals/index.html">are taking steps to minimize</a> the number of people losing their coverage.</p>
<p>For about 3 in 4 of the people who lost their Medicaid coverage, it was <a href="https://www.nytimes.com/2023/05/26/us/politics/medicaid-coverage-pandemic-loss.html">for procedural reasons</a>, such as not filing required paperwork. The remaining 1 in 4 probably became ineligible due to an <a href="https://www.policygenius.com/health-insurance/a-state-by-state-guide-to-medicaid/">increase in their income</a>.</p>
<h2>Gains from Medicaid</h2>
<p>There is <a href="https://doi.org/10.1177/0002716219874772">mounting evidence</a> that Medicaid has many benefits for society – especially children.</p>
<p>For example, when low-income families <a href="https://doi.org/10.3368/jhr.54.3.0816.8173R1">remain in the program for long periods of time</a>, they tend to have <a href="https://www.jstor.org/stable/2138939">lower child mortality rates</a>. Medicaid coverage is also associated with <a href="https://doi.org/10.1002/soej.12614">kids faring better in school</a>.</p>
<p>Researchers have also determined that the federal government and state governments can get <a href="https://doi.org/10.1377/hlthaff.2020.00633">boosts in tax revenue</a> when families obtain this health insurance coverage through Medicaid and CHIP that exceed government spending on these programs. That’s because having better access to health care in the long term is <a href="https://doi.org/10.1093/qje/qjaa006">associated with being healthier</a>, staying in school longer and eventually earning a higher income.</p>
<p>The toll that the steep decline in health insurance coverage now underway will take on Americans remains to be seen.</p><img src="https://counter.theconversation.com/content/208146/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Maithreyi Gopalan has received funding from the Spencer Foundation, American Educational Research Association, Russell Sage Foundation, and the Student Experience Research Network. She is an Impact Fellow (2023-24) at the Federation of American Scientists. </span></em></p>
The health coverage program’s enrollment soared during the three years after March 2020 due to temporary policies adopted at the start of the COVID-19 pandemic.
Maithreyi Gopalan, Assistant Professor of Education and Public Policy, Penn State
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/206922
2023-06-08T12:31:17Z
2023-06-08T12:31:17Z
Republicans’ anti-ESG attack may be silencing insurers, but it isn’t changing their pro-climate business decisions
<figure><img src="https://images.theconversation.com/files/530508/original/file-20230607-19-fldsij.jpg?ixlib=rb-1.1.0&rect=12%2C6%2C3995%2C2661&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Insurers are facing rising costs from effects of climate change.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/aerial-view-of-new-york-city-skyline-at-night-royalty-free-image/1368629737">© Marco Bottigelli/Moments via Getty Imagse</a></span></figcaption></figure><p>Over recent months there has been an orchestrated pushback against investors and insurers who integrate the risks of climate change into their business models. That pushback – emanating from Republican-led states – is having an impact on how companies speak publicly. But whether it will affect their efforts to respond to climate change is less clear.</p>
<p>The latest targets have been global insurance companies, and their responses offer some insight. </p>
<p>Under pressure, several major insurers, including <a href="https://www.reinsurancene.ws/axa-and-allianz-have-announced-their-exit-from-the-nzia/">AXA, Allianz</a>, <a href="https://www.reinsurancene.ws/lloyds-becomes-the-10th-major-player-to-mark-its-exit-from-nzia/">Lloyd’s</a> and <a href="https://www.reinsurancene.ws/swiss-re-joins-other-major-re-insurers-in-leaving-net-zero-insurance-alliance/">Swiss Re</a>, have pulled out of a United Nations-organized alliance committed to a global goal of net-zero emissions by mid-century. There’s a word for companies going quiet in the face of orchestrated attacks: “<a href="https://twitter.com/Ros_Rodriguez_/status/1663806010538983426">greenhushing</a>.”</p>
<p>But while the insurers’ departures from the alliance might look like a victory for politicians and political donors who want to delay action on climate change, the companies say leaving doesn’t change their business decisions.</p>
<p>I have worked with businesses globally on sustainable development for <a href="https://fletcher.tufts.edu/people/staff/rachel-kyte">over 20 years</a> and follow both what they say and what they do. The insurance industry has obvious reasons to care about climate change and efforts to slow it, starting with the fact that disasters cost them money and the risks are rising.</p>
<h2>The assault on protecting the climate</h2>
<p>Republicans began <a href="https://www.reuters.com/world/us/industry-targets-us-republicans-anti-esg-efforts-2023-04-22/">targeting ESG investors</a> – those who incorporate environmental, social and governance performance standards in making investment decisions – a few years ago as <a href="https://www.bloomberg.com/company/press/esg-may-surpass-41-trillion-assets-in-2022-but-not-without-challenges-finds-bloomberg-intelligence/">ESG-managed assets grew</a> into the tens of trillions of dollars. Texas led the way in 2021 <a href="https://www.texastribune.org/2022/08/24/texas-boycott-companies-fossil-fuels/">with a law</a> prohibiting state entities from investing with firms that cut their investments in fossil fuel industries. </p>
<p>In 2022, Republican state attorneys general began to go after the <a href="https://www.gfanzero.com/">Glasgow Financial Alliance for Net Zero</a>, or GFANZ, an umbrella body for insurers, banks, asset owners and asset managers. The influential group had a starting membership of over 400 financial institutions representing over US$130 trillion of assets under management. </p>
<p>One line of attack accuses GFANZ members of <a href="https://judiciary.house.gov/media/press-releases/judiciary-republicans-woke-companies-pursuing-esg-policies-may-violate">breaking antitrust rules</a>, claiming that when companies participate in groups committed to lowering greenhouse gas emissions, competitors are cooperating in ways that affect prices in violation of U.S. law.</p>
<p><iframe id="A9b1v" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/A9b1v/6/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>“Net-zero” is shorthand for taking steps to limit global warming to 1.5 degrees Celsius, an international goal to prevent increasingly severe climate damage that is <a href="https://theconversation.com/the-water-cycle-is-intensifying-as-the-climate-warms-ipcc-report-warns-that-means-more-intense-storms-and-flooding-165590">fueling severe storms</a>, <a href="https://www.drought.gov/news/study-shows-climate-change-main-driver-increasing-fire-weather-western-us">heat and wildfires</a>. Clubs have formed across the financial value chain to find solutions. Among them is the U.N.-convened <a href="https://www.unepfi.org/net-zero-insurance/">Net-Zero Insurance Alliance (NZIA)</a>, a group of some of the world’s leading insurers and reinsurers. Members commit to transitioning their insurance and reinsurance underwriting portfolios to net-zero greenhouse gas emissions by 2050.</p>
<p>In a letter on May 15, 2023, <a href="https://www.propertyinsurancecoveragelaw.com/files/2023/05/2023-05-15-NZIA-Letter.pdf">23 Republican attorneys general</a> took their criticism further and attempted to blame the insurance alliance – rather than the rising cost of disasters like wildfires and hurricanes – for economic ills from rising insurance premiums, fuel prices and inflation.</p>
<p>Facing the threat of lawsuits, whether viable or not, and the potential for reputational harm, several mainly European-based insurers and reinsurers with substantial investments in the U.S. left the group.</p>
<p>The attacks have dampened the public discussion on evolving practices in net-zero pathways and ESG investing, even for those who stay. Fewer firms are keen to draw attention to their progress because, in a global market, the backlash from the U.S. threatens any of them. </p>
<p>GFANZ has stated that the “political attacks are now <a href="https://www.reuters.com/sustainability/political-attacks-are-damaging-insurers-climate-efforts-gfanz-2023-05-26/">interfering with insurers’ independent efforts</a> to price climate risk, which will harm policyholders, main street investors and local economies.”</p>
<h2>Silencing climate voices, but not actions</h2>
<p>However, while the insurers might not be speaking out, their assessment of climate trends hasn’t changed, nor has the impact of those trends on their businesses.</p>
<p>When Lloyd’s pulled out of the alliance in late May 2023, the London-based insurance and reinsurance company made clear that it remains “committed to delivering our sustainability strategy including supporting the global economy’s transition.” It said it <a href="https://www.lloyds.com/news-and-insights/news/lloyds-has-decided-to-withdraw-from-the-nzia">continues to</a> support the U.N.’s <a href="https://www.unepfi.org/insurance/insurance/">Principles for Sustainable Insurance</a> and <a href="https://sdgs.un.org/goals">Sustainable Development Goals</a>.</p>
<p>Swiss Re also stressed that it has kept its sustainability strategy the same and that its pullout doesn’t reflect a lesser commitment to climate policies. It remains a member of the <a href="https://www.unepfi.org/net-zero-alliance/">Net Zero Asset Owner Alliance</a>.</p>
<p>Swiss Re Group’s data clearly shows the reason why. In 2021, some <a href="https://www.swissre.com/institute/research/sigma-research/sigma-2022-01.html">$270 billion in losses</a> were attributable to natural catastrophes worldwide. The $111 billion of those losses that were insured represented the fourth highest payout since Swiss Re Institute, the insurer’s research arm, began keeping records in 1970.</p>
<p>The World Meteorological Organization reports that weather and climate disasters such as floods, heat waves and forest fires have <a href="https://news.un.org/en/story/2021/09/1098662">increased fivefold in the past 50 years</a>. These disasters have caused environmental harm, the loss of <a href="https://library.wmo.int/index.php?lvl=notice_display&id=21930">more than 2 million lives</a> and more than $3.64 trillion in economic damage.</p>
<p>Not talking about these risks doesn’t help homeowners and businesses that rely on insurance, and doing nothing to stop climate change <a href="https://www.unep.org/resources/emissions-gap-report-2022">worsens the threats</a>. Some consultants and auditors have started sounding the alarm that increasing natural catastrophes could <a href="https://www.pwc.com/us/en/industries/financial-services/library/insurance-industry-trends.html">collapse the insurance market model</a> we know today.</p>
<h2>An economy-wide problem</h2>
<p>The insurance industry plays a crucial role in the overall functioning of economies. It promotes resilience by providing a safety net against unexpected events, helping individuals and businesses to recover more quickly. It facilitates commerce and trade; for instance, marine insurance covers the risks of shipping goods, ensuring that trade flows smoothly. It also encourages risk-management practices.</p>
<p>Without insurance, disaster costs would fall heavily on individuals and businesses, hindering economic growth and stability.</p>
<figure class="align-center ">
<img alt="A man with a tape measure on his belt and camera looks at debris piles left between buildings after Hurricane Michael hit Florida. The siding of the building is also ripped off." src="https://images.theconversation.com/files/530512/original/file-20230607-28-g6nfvo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/530512/original/file-20230607-28-g6nfvo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/530512/original/file-20230607-28-g6nfvo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/530512/original/file-20230607-28-g6nfvo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/530512/original/file-20230607-28-g6nfvo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/530512/original/file-20230607-28-g6nfvo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/530512/original/file-20230607-28-g6nfvo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An insurance adjuster reviews a property in Mexico Beach, Fla., after Hurricane Michael in 2018. The storm caused about $25 billion in damage.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/an-insurance-adjuster-looks-over-damage-to-the-home-of-news-photo/1052458328?adppopup=true">Scott Olson/Getty Images</a></span>
</figcaption>
</figure>
<p>Already, as climate risks increase, some regions are becoming increasingly uninsurable. State Farm and Allstate cited wildfire risks when they recently announced they would <a href="https://theconversation.com/why-insurance-companies-are-pulling-out-of-california-and-florida-and-ways-to-fix-the-problem-207172">stop selling new home insurance policies in California</a>, putting pressure on outdated regulation of the insurance industry.</p>
<h2>Looking ahead</h2>
<p>As the United States heads into its long election season, the ESG backlash risks pushing more companies’ transition pathways into the quiet zone and slowing much-needed regulation.</p>
<p>The world is at an inflection point in its climate transition efforts. Capital is <a href="https://about.bnef.com/blog/global-low-carbon-energy-technology-investment-surges-past-1-trillion-for-the-first-time/">shifting to low-emissions technologies</a> and, in some cases, <a href="https://www.washingtonpost.com/business/energy/2023/05/17/energy-transition-who-wants-to-become-a-heat-pump-billionaire/393c2a9e-f46a-11ed-918d-012572d64930_story.html">reshaping industries</a> faster than imagined. </p>
<p>Insurers have the ability to accelerate the transition through their underwriting practices and promoting risk mitigation through their substantial investment portfolios. They also recognize that, to protect their balance sheets and for the sake of the planet, society needs to pick up the pace in the transition to net zero.</p><img src="https://counter.theconversation.com/content/206922/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Kyte does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
A ‘greenhushing’ campaign is targeting insurers, who have the power to accelerate the transition to cleaner energy in how they write policies and invest.
Rachel Kyte, Dean of the Fletcher School, Tufts University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/207172
2023-06-07T12:24:20Z
2023-06-07T12:24:20Z
Why insurance companies are pulling out of California and Florida, and how to fix some of the underlying problems
<figure><img src="https://images.theconversation.com/files/530434/original/file-20230606-17-etpcwb.jpg?ixlib=rb-1.1.0&rect=22%2C6%2C2074%2C1367&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Wildfires can destroy hundreds of homes within hours.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/view-29-october-2003-from-a-sea-king-helicopter-assigned-to-news-photo/1249142472">PH2(AW/SW) Michael J. Pusnik, Jr / Navy Visual News Service / AFP via Getty Images</a></span></figcaption></figure><p>When the nation’s No. 1 and No. 4 property and casualty insurance companies – <a href="https://www.insurance.ca.gov/0400-news/0102-alerts/2023/Consumer-Alert-on-State-Farm's-Decision.cfm">State Farm</a> and <a href="https://www.sfchronicle.com/california/article/insurance-allstate-fires-18130622.php">Allstate</a> – confirmed that they would stop issuing new home insurance policies in California, it may have been a shock but shouldn’t have been a surprise. It’s a trend Florida and other hurricane- and flood-prone states know well.</p>
<p>Insurers have been retreating from high-risk, high-loss markets for years after catastrophic events. Hurricane Andrew’s unprecedented <a href="https://doi.org/10.1111/rmir.12222">US$16 billion in insured losses</a> across Florida in 1992 set off alarm bells. <a href="https://www.ncei.noaa.gov/access/billions/">Multibillion-dollar disasters</a> since then have left several insurers <a href="https://www.iii.org/sites/default/files/docs/pdf/triple-i_trends_and_insights_louisiana_03282023.pdf">insolvent</a> and pushed many others to reevaluate what they’re willing to insure.</p>
<p>I co-direct the Center for Emergency Management and Homeland Security at Arizona State University, where <a href="https://scholar.google.com/citations?user=JYLzOQgAAAAJ&hl=en">I study disaster losses</a> and manage the <a href="https://cemhs.asu.edu/sheldus">Spatial Hazard Events and Losses database (SHELDUS)</a>. As losses from natural hazards <a href="https://cemhs.asu.edu/sheldus/reports">steadily increase</a>, <a href="https://doi.org/10.1007/s11166-006-0171-z">research shows</a> it’s not a question of if insurance will become unavailable or unaffordable in high-risk areas – it’s a question of when. </p>
<h2>Reinsurers are worried</h2>
<p>Insurance is a vehicle to transfer risk. When an individual buys an insurance policy, that person pays to transfer the risk of expensive repairs to the insurer if the home is damaged by a covered event, like a fire or thunderstorm. Most policyholders don’t experience major disasters, so insurance companies make money.</p>
<p>However, disasters are extremely costly when they do occur, so insurers also buy their own insurance, called reinsurance.</p>
<p>Reinsurance <a href="https://www.insurancejournal.com/news/international/2023/06/02/723754.htm">costs have been rising fast</a> in response to expensive disasters around the world in recent years. <a href="https://www.ft.com/content/cddcae5c-2783-4b40-9715-06104774248a">Reinsurers’</a> risk-adjusted property-catastrophe prices rose <a href="https://www.howdengroupholdings.com/news/1st-june-risk-adjusted-property-cat-reinsurance-pricing-index-rises-to-highest-level-since-inception">33% on average</a> at their June 1, 2023, renewal, after a 25% rise in 2022, according to reinsurance broker Howden Tiger’s analysis.</p>
<p>If prices are too high and insurers can no longer transfer excessive risk to the reinsurance market, they are stuck “holding the risk” – meaning the cost of claims when disasters strike. A big enough disaster can put insurance companies out of business, or they can decide to leave the state, as seen in California, <a href="https://www.wwltv.com/article/news/investigations/david-hammer/louisianas-insurance-crisis-what-can-fix-it/289-a9fe2f3c-8701-4f75-959f-6ec7b5e7f380">Louisiana</a> and elsewhere.</p>
<p><iframe id="HoAzR" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/HoAzR/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Responsible insurers are not in the business of gambling, so they do what State Farm and Allstate did: They reevaluate their portfolios – the various lines of insurance they offer, such as auto, life, property insurance and health insurance – and their prices. Insurance is a highly data-driven business and uses some of the most sophisticated climate and risk modeling in the world to forecast future risks, including the likelihood a property will be damaged by wildfire or other natural hazards.</p>
<p>State Farm cited “catastrophe exposure” as a reason for ending new high-risk personal and commercial property and casualty policies <a href="https://images.theconversation.com/files/530455/original/file-20230606-27-nycs2i.png">in California</a>. That refers to the likelihood that costly claims would exceed the risk State Farm was willing to accept.</p>
<h2>Why drop only California?</h2>
<p>So, why did State Farm and Allstate only stop new policies in California and not in other wildfire-prone states like Colorado or Arizona?</p>
<p>The answer can only be speculative since State Farm or Allstate don’t publicly disclose their exposure. That’s calculated based on how many personal and commercial property and casualty policies the company holds in the state, particularly in the wildland-urban interface where fire risk is higher, and at what value.</p>
<figure class="align-center ">
<img alt="Firefighters work on the remains of a high-end home, with its elaborate front entrance and fountain out front being about all the remains from a 2022 fire near Los Angeles that's recognizable." src="https://images.theconversation.com/files/530459/original/file-20230606-23-aus8yz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/530459/original/file-20230606-23-aus8yz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=371&fit=crop&dpr=1 600w, https://images.theconversation.com/files/530459/original/file-20230606-23-aus8yz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=371&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/530459/original/file-20230606-23-aus8yz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=371&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/530459/original/file-20230606-23-aus8yz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=466&fit=crop&dpr=1 754w, https://images.theconversation.com/files/530459/original/file-20230606-23-aus8yz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=466&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/530459/original/file-20230606-23-aus8yz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=466&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Expensive home building prices in California have also raised the risk for insurers.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/firefighters-puts-out-hot-spots-at-a-house-on-vista-court-news-photo/1397094373?adppopup=true">Paul Bersebach/MediaNews Group/Orange County Register via Getty Images</a></span>
</figcaption>
</figure>
<p>State Farm did cite California’s increasing wildfire risk and home construction prices, but there are other influences to consider.</p>
<p>One is state insurance regulations that can limit premium increases, prohibit policy cancellations and require certain levels of coverage. Insurer Chubb’s chief executive mentioned restrictions that left it <a href="https://www.wsj.com/articles/wildfire-risk-in-california-drives-insurers-to-pull-policies-for-pricey-homes-11642593601">unable to charge</a> “an adequate price for the risk” as part of the reason for its 2022 decision to not renew policies for expensive homes in high-risk areas of California. California also has a unique “<a href="https://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/notice-re-coverage-for-mudslide-and-earth-movement.pdf">efficient proximate cause” rule</a> that forces property insurers to also cover post-fire flooding, such as mudslides. Rainy winters like 2023’s often <a href="https://theconversation.com/atmospheric-rivers-over-californias-wildfire-burn-scars-raise-fears-of-deadly-mudslides-this-is-what-cascading-climate-disasters-look-like-197563">trigger destructive mudslides</a> in wildfire burn areas. </p>
<h2>What happens now?</h2>
<p>When insurers pull out of a community, residents and companies without access to property and casualty insurance are left holding their own risk – and paying the price if a disaster strikes. From a societal and political perspective, that’s a problem.</p>
<p>Residents and businesses without insurance <a href="https://doi.org/10.1080/17477891.2019.1608148">tend to recover more slowly</a>. Uninsured residents often depend on donations, loans or federal individual assistance. The latter, however, is only available for catastrophic disasters and covers only immediate needs.</p>
<figure class="align-center ">
<img alt="A one-story apartment building on stilts with the roof torn off after Hurricane Sally. Pink beach shoes and folded beach chairs sit on a porch." src="https://images.theconversation.com/files/530430/original/file-20230606-21-8n6hdp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/530430/original/file-20230606-21-8n6hdp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=414&fit=crop&dpr=1 600w, https://images.theconversation.com/files/530430/original/file-20230606-21-8n6hdp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=414&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/530430/original/file-20230606-21-8n6hdp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=414&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/530430/original/file-20230606-21-8n6hdp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=520&fit=crop&dpr=1 754w, https://images.theconversation.com/files/530430/original/file-20230606-21-8n6hdp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=520&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/530430/original/file-20230606-21-8n6hdp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=520&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Hurricanes cause so much damage, they can put small insurers out of business.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/an-aerial-view-from-a-drone-shows-jamie-cade-waiting-as-her-news-photo/1273167528?adppopup=true">Joe Raedle/Getty Images</a></span>
</figcaption>
</figure>
<p>To fill the gap and provide access to insurance, states including <a href="https://www.eenews.net/articles/growing-insurance-crisis-spreads-to-texas/">California, Florida, Louisiana and Texas</a> have created either private or public insurance options of last resort with generally very pricey premiums.</p>
<p>Residents covered by these options transfer their risk to the state, such as in <a href="https://www.lacitizens.com/">Louisiana</a> and <a href="https://www.citizensfla.com/">Florida</a> – meaning state taxpayers, who fund the state insurance programs, hold the risk directly or indirectly. In California, the privately insured FAIR Plan, in existence since 1968, wrote close to <a href="https://www.insurance.ca.gov/01-consumers/200-wrr/upload/CDI-Fact-Sheet-Residential-Insurance-Market-Policy-Count-Data-December-2022.pdf">270,000 policies in 2021, nearly double the number in 2018</a>.</p>
<p>Similarly, anyone purchasing flood insurance through the National Flood Insurance Program since 1968 is transferring their risk to federal taxpayers. The NFIP currently insures <a href="https://www.fema.gov/flood-insurance">almost $1.3 trillion in value</a> across 5 million policies.</p>
<p><iframe id="A9b1v" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/A9b1v/6/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Politicians are not catastrophe risk experts, though, and do not make decisions based on data alone.</p>
<p>In the short term, I expect that insurance pools, as well as federal- and state-run insurers of last resort, will add more policies, and that state legislators will incentivize the return of insurers. But while the <a href="https://www.wdsu.com/article/louisiana-house-insurance-incentive-proposal-passes/42735972">political willingness to support such a trend exists</a>, the financial resources do not.</p>
<p>The National Flood Insurance Program has plenty of lessons to teach about the challenges of balancing exposure and keeping premiums affordable: It is <a href="https://www.fema.gov/case-study/rising-interest-expenses">more than $20 billion in debt</a>. <a href="https://www.insurancejournal.com/news/southcentral/2019/12/10/550879.htm">Texas has resorted to charging</a> insurers operating in the state to help cover its program’s costs.</p>
<h2>Fixing insurance starts with the property itself</h2>
<p>Despite the risk of properties becoming uninsurable, communities today continue to permit development in floodplains, along coastlines and in the wildfire-prone wildland urban interface. Inadequate building codes allow developers to build homes that cannot withstand severe weather. These practices have placed millions of residents and the things they value in harm’s way.</p>
<p>As climate change continues to <a href="https://nca2018.globalchange.gov/">dial up the frequency and severity</a> of natural hazards, there are some steps states and communities can take involving property to lower the risk:</p>
<ul>
<li><p>Make smarter land use choices and limit development in high-risk areas to avoid placing people and the things they value in harm’s way.</p></li>
<li><p>Adopt more stringent building codes and safety standards at state and community levels.</p></li>
<li><p>Price risk into home sales, either through an insurance contingency that allows the buyer to withdraw when they cannot secure insurance or lower assessed property values for real estate in high-risk areas, which can dissuade builders and buyers.</p></li>
<li><p>Require comprehensive disclosures of all present and future risks along with historic claims associated with a property to educate potential buyers.</p></li>
<li><p>Make risk information accessible and understandable. My research shows that most people have a <a href="https://theconversation.com/flood-risk-ratings-translating-risk-to-future-costs-helps-homebuyers-and-renters-grasp-the-odds-186798">hard time fully grasping</a> how likely they are to be affected by a catastrophic event. They need better tools that communicate the information in a way that resonates with them.</p></li>
<li><p>Help residents in high-risk areas relocate <a href="https://theconversation.com/as-coastal-flooding-worsens-some-cities-are-retreating-from-the-water-164463">through buyouts</a> and <a href="https://theconversation.com/managed-retreat-done-right-can-reinvent-cities-so-theyre-better-for-everyone-and-avoid-harm-from-flooding-heat-and-fires-163052">managed retreat</a> that returns the land to nature or public uses such as parks.</p></li>
</ul><img src="https://counter.theconversation.com/content/207172/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Melanie Gall currently receives research funding from the National Academies' Gulf Research Program, HUD, USAID, DHS, Feeding America, and the Society of Actuaries. She is a member of the National Hazard Mitigation Association, the North American Alliance of Hazards and Disaster Research Institutes, the Association of State Floodplain Managers, and American Association of Geographers. </span></em></p>
It’s not a question of if insurance will become unavailable or unaffordable in areas at high risk of wildfires, hurricanes and other damage – it’s a question of when. A disaster risk expert explains.
Melanie Gall, Assistant Professor and Co-Director, Center for Emergency Management and Homeland Security, Watts College, Arizona State University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/202915
2023-04-21T12:41:15Z
2023-04-21T12:41:15Z
Boy Scouts of America can now create $2.4 billion fund to pay claims for Scouts who survived abuse – a bankruptcy expert explains what’s next
<figure><img src="https://images.theconversation.com/files/518556/original/file-20230330-1211-2pnq14.jpg?ixlib=rb-1.1.0&rect=54%2C46%2C2757%2C1918&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The alleged sexual abuse that led to this settlement occurred from 1944 through 2016. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/boy-scouts-of-america-dressed-in-uniforms-carry-american-news-photo/1159640147">Newsday LLC via Getty Images</a></span></figcaption></figure><p><em>On April 19, 2023, the <a href="https://www.prnewswire.com/news-releases/the-boy-scouts-of-america-bsa-announces-confirmation-of-plan-of-reorganization-and-emergence-from-chapter-11-bankruptcy-to-equitably-compensate-survivors-while-ensuring-scouting-continues-across-the-country-301802086.html">Boy Scouts of America declared that it has exited its bankruptcy</a> case after <a href="https://www.reuters.com/legal/boy-scouts-emerges-chapter-11-bankruptcy-2023-04-19/">clearing one of the last legal hurdles</a> in its way. Some insurance companies and sex abuse claimants objected to the Boy Scouts’ plan to pay claimants, but the 3rd U.S. Circuit Court of Appeals held that the plan can go ahead anyway while the insurers’ appeal is pending. It’s now possible to begin the process of paying at least US$2.45 billion to resolve about 82,000 claims against the Boy Scouts and affiliated entities asserted by people who allege that they were <a href="https://abusedinscouting.com/history-of-abuse/">sexually abused as children</a> over the <a href="https://vaumc.org/blog/2022/07/08/important-positive-news-regarding-the-boy-scouts-and-our-local-churches/">past 80 years</a>.</em> </p>
<p><em>The Boy Scouts operate through the national organization known as the BSA, which includes hundreds of separate but affiliated organizations known as <a href="https://www.scouting.org/about/local-council-locator/">local councils</a>, and faith-based or civic groups called <a href="https://scoutingmagazine.org/2021/04/scouting-faq-chartered-organizations">chartered organizations</a>. Because these troop-sponsoring nonprofit organizations across the country are responsible for ensuring the safety of children in scouting, all of them faced child sexual abuse claims.</em></p>
<p><em>The BSA <a href="https://cases.omniagentsolutions.com/?clientId=3552">filed for bankruptcy in February 2020</a> to halt the <a href="https://apnews.com/article/business-delaware-dover-lawsuits-religion-38c9b9db99c491bec9e1bd31d26ea63d">hundreds of lawsuits that were then pending</a> in state courts. More than two years later, the BSA reached an agreement with many of its insurers, all of the local councils, some of the chartered organizations and <a href="https://www.wsj.com/articles/first-payments-to-sex-abuse-victims-in-boy-scouts-bankruptcy-could-take-18-months-11648077889">roughly 85% of all sex abuse claimants</a> on a plan to pay claims.</em> </p>
<p><em><a href="https://pennstatelaw.psu.edu/faculty/reilly">The Conversation asked Marie T. Reilly</a>, a Penn State law professor who studies bankruptcy cases involving child sex abuse claims against Catholic dioceses, to explain what this means.</em></p>
<h2>What happens next?</h2>
<p>The plan the court approved in the BSA’s bankruptcy case will <a href="https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/6cfcb7aa-d181-40ec-aad1-5543a02babcd_BSA_Plan_Summary_and_FAQs.pdf">create a settlement trust</a> to process and pay sexual abuse claims.</p>
<p>Two retired judges and a committee made up of lawyers who represent sex abuse claimants will administer the trust, which will be <a href="https://www.bsarestructuring.org/event/district-court-rules-in-favor-of-bsa-upholding-the-order-to-confirm-the-bsas-plan-of-reorganization/">the largest sexual abuse compensation fund</a> ever established in the U.S. It will operate independently of the BSA. </p>
<p>The trust will take over responsibility for all claims against the BSA. All parties that contribute to it will be relieved of their liability.</p>
<h2>Where will the money come from?</h2>
<p>The BSA will contribute to the trust property estimated to be worth $220 million. Local councils will contribute about $515 million in cash, property and money obtained from their insurers. Chartered organizations, including the <a href="https://www.wsj.com/articles/boy-scouts-revises-bankruptcy-plan-to-remove-250-million-mormon-church-settlement-11660589753">Church of Jesus Christ of Latter-day Saints</a> and <a href="https://apnews.com/article/business-religion-delaware-sexual-abuse-by-clergy-dover-287019e3686c8b0005ffe6ee715a4a04">Roman Catholic and Methodist</a> churches, schools and other affiliated institutions, will also contribute and receive a release from liability for claims.</p>
<p>The Church of Jesus Christ of Latter-day Saints, still sometimes called the Mormon Church, used to participate in the Boy Scouts but <a href="https://www.nytimes.com/2018/05/09/us/boy-scouts-mormon-church.html">severed ties to it in 2018</a>. It will contribute <a href="https://www.bsarestructuring.org/event/bsa-marks-progress-with-chartered-organizations-and-announces-new-agreements-for-1-037-billion-in-contributions-to-trust/">$250 million</a>.</p>
<p>Insurance companies that issued policies covering the BSA will contribute about $1.6 billion. The trustee of the settlement trust has the authority to sue the insurance companies that have not agreed to the settlement to try to get more money to pay claims.</p>
<h2>How much money will survivors get and when will payments begin?</h2>
<p>People who have filed sex abuse claims have three options:</p>
<p>1) Accept a $3,500 payment based on the information already submitted about their claim in the bankruptcy case. <a href="https://www.wsj.com/articles/first-payments-to-sex-abuse-victims-in-boy-scouts-bankruptcy-could-take-18-months-11648077889">About 6,700 survivors have already elected</a> this option.</p>
<p>2) Submit additional information and have the trustee determine the amount based on <a href="https://www.bsarestructuring.org/estimated-potential-payment-calculator/">agreed-upon factors</a>, including the severity of the abuse.</p>
<p>3) Sue in state court and have a jury determine the amount.</p>
<p>Payments will not start to flow until the trust determines the payment amount of each claim. If the fund is not big enough to pay every claim in full, the trust will reduce the amount of each claim to reflect the estimated shortfall. </p>
<p>It’s hard to say how long it will take to process the nearly 75,000 claims that have not elected the $3,500 option.</p>
<p>Among other things, the trust will need to hire and onboard staff and to set up secure systems to gather and evaluate personal information from tens of thousands of people.</p>
<p>This is likely to be both expensive and slow.</p>
<h2>How will this settlement affect the Boy Scouts?</h2>
<p>The Boy Scouts face an uncertain future after the bankruptcy case.</p>
<p>The organization’s <a href="https://www.ncacbsa.org/who-pays-for-scouting/">revenue depends on membership dues</a>, contributions from its troop sponsoring organizations, product sales, service fees and donations. And the dues are lower because of a <a href="https://apnews.com/article/only-on-ap-health-coronavirus-pandemic-7afeb2667df0a391de3be67b38495972">sharp decline in membership</a>. The BSA now has a little <a href="https://blog.scoutingmagazine.org/2023/01/05/1-million-and-growing-bsa-membership-is-on-the-rise/">more than 1 million members</a> across the country – about <a href="https://www.nytimes.com/2021/07/01/us/boy-girl-scouts-membership-decrease-covid.html">half as many as in 2019</a>.</p>
<p>Trying to convert some of the Boy Scouts-owned properties into cash to meet the organization’s obligations under the bankruptcy plan is complicated. It may take years to accomplish, dragging out the timeline.</p>
<p>Local councils are already selling property to raise the cash they need to make the contribution to the fund.</p>
<p>For example, a local council in New Jersey is <a href="https://www.poconorecord.com/story/news/environment/2022/12/21/boy-scout-camp-sale-in-poconos-would-go-towards-victims-of-sex-abuse/69734886007/">selling its land in the Pocono Mountains</a> to pay its share of the contribution to the compensation fund. </p>
<p><a href="https://www.wfmz.com/news/area/poconos-coal/monroe-county-group-hoping-to-keep-former-boy-scout-camp-from-being-sold-to-developers/article_ec0bc5be-9135-11ed-bbcb-c7ebc89469f6.html">Local residents are concerned</a> that the pristine land, estimated to be worth $4 million, will end up lost to developers.<br>
The same controversy is unfolding regarding the <a href="https://www.curbed.com/2022/07/boy-scouts-open-space-for-sale.html">sale of local council property in Connecticut</a>.</p>
<p>The <a href="https://www.fs.usda.gov/science-technology/loss-of-open-space">U.S. Forest Service estimates</a> that 6,000 acres (24 square kilometers) of open space are lost every day to other uses. <a href="https://www.scouting.org/outdoor-programs/properties/">Local Boy Scouts councils own</a> a significant portion of open space in the U.S., and much of it may be lost.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A lakeside structure in the wilderness with a large rustic building in the background." src="https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518559/original/file-20230330-17-vzefiw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Deer Lake Boy Scout Reservation in Killingworth, Conn., is among the many properties nationwide being sold by local councils.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BoyScouts-CampSelloff/02f7fcf4e1234edebf58bc56a493144b/photo?boardId=37be9465fcce45d283d5431cccb20a6a&st=boards&mediaType=audio,photo,video,graphic&sortBy=&dateRange=Anytime&totalCount=331&currentItemNo=4">AP Photo/Pat Eaton-Robb</a></span>
</figcaption>
</figure>
<h2>Are there precedents for this?</h2>
<p><a href="https://elibrary.law.psu.edu/bankruptcy/">Catholic organizations have resolved liability</a> for child sexual abuse in bankruptcy cases with plans that are similar to the BSA’s. But the scale of the Boy Scouts’ case in terms of the number of claims and the size of the settlement trust fund is much larger than any case involving a single diocese, or any other nonprofit organization bankruptcy case.</p><img src="https://counter.theconversation.com/content/202915/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marie T. Reilly does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
This is a green light for creating the largest-ever compensation fund for sex abuse claims.
Marie T. Reilly, Professor of Law, Penn State
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/203753
2023-04-14T03:46:53Z
2023-04-14T03:46:53Z
Cyclone Ilsa: how disasters, the housing crisis and underinsurance can conspire to worsen inequality
<p>Most communities along the northwest coast of Western Australia appear to have dodged a bullet after <a href="https://theconversation.com/anatomy-of-monster-storm-how-cyclone-ilsa-is-shaping-up-to-devastate-the-wa-coast-203678">Cyclone Ilsa</a> made landfall overnight. While some structures, such as the Pardoo Roadhouse, were damaged, the destruction was less than we feared.</p>
<p>But unfortunately, there will be a next time. <a href="https://theconversation.com/climate-fuelled-disasters-warning-people-is-good-but-stopping-the-disaster-is-best-here-are-4-possible-ways-to-do-it-194916">Climate change</a> is predicted to bring increasingly severe and frequent weather events and disasters. </p>
<p>As those in recently flooded regions of New South Wales and Queensland know, it takes a long time to rebuild and recover from disasters. And alarmingly, our resilience is being undermined by the housing crisis, underinsurance and inadequate planning. </p>
<p>The problems can conspire to worsen inequality. It means vulnerable populations are hit hardest when disaster strikes. </p>
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<strong>
Read more:
<a href="https://theconversation.com/is-your-neighbourhood-underinsured-search-our-map-to-find-out-168836">Is your neighbourhood underinsured? Search our map to find out</a>
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<h2>Disasters, housing and underinsurance</h2>
<p>The cost of housing is driving many people into financial stress. With little if any money to spare, many Australians are <a href="https://melbourneinstitute.unimelb.edu.au/publications/research-insights/search/result?paper=3769030">likely not to have insurance</a>. This leaves them extra vulnerable should disaster hit. </p>
<p><a href="https://theconversation.com/insurance-is-unaffordable-for-some-but-its-middle-australia-that-is-underinsured-105662">Renters</a> are among those least likely to have insurance. This means they may struggle to pay for alternative accommodation if their home is affected by a disaster. </p>
<p><a href="https://theconversation.com/underinsurance-is-entrenching-poverty-as-the-vulnerable-are-hit-hardest-by-disasters-152083">Research</a> I’ve co-authored has revealed tragic story after tragic story of people realising too late they were not insured, or their level of insurance was too low to cover the cost of rebuilding their lives after disaster.</p>
<p>A national housing shortage means options can be limited for both renters and homeowners looking for alternative accommodation after their homes are damaged in a disaster. </p>
<p>Increasing housing supply may address some of these issues. However, inadequate planning can lead to housing developments in disaster-prone areas such as <a href="https://theconversation.com/averting-disaster-why-we-shouldnt-build-on-australian-floodplains-30">floodplains</a>. It can also lead to environmental degradation that can increase exposure of homes and communities to disasters. </p>
<p>For example, coastal ecosystems such as the mangroves of northern Australia can <a href="https://www.dcceew.gov.au/sites/default/files/documents/factsheet-wetlands-resilience-natural-hazards.pdf">reduce</a> the impact of storms. They slow the speed and size of waves and stabilise soil and sediments and can offer some protection to nearby settlements. </p>
<p>But <a href="https://www.dcceew.gov.au/water/wetlands/publications/factsheet-wetlands-mangroves-saltmarsh">development</a> for housing or infrastructure near coastal regions can put these ecosystems at risk.</p>
<p>Insurance for such homes and communities may become unaffordable or unattainable as disasters <a href="https://www.abc.net.au/news/2022-08-17/how-climate-change-is-pushing-insurance-stress-to-new-extremes/101336302">worsen</a>. </p>
<p>Add in the tyranny of distance faced by people living in remote and rural Australia, and we see increasing numbers of people and communities <a href="https://theconversation.com/disastrous-floods-in-wa-why-were-we-not-prepared-197407">at risk</a> from the social and financial impacts of disasters in the era of climate change. </p>
<h2>Failing to address this mix can worsen inequality</h2>
<p>If left unaddressed, our current housing crisis coupled with climate change could see more and more people living in the kinds of <a href="https://theconversation.com/shanty-towns-and-eviction-riots-the-radical-history-of-australias-property-market-185129">shanty towns and tent cities</a> seen around the time of the Great Depression. </p>
<p>We risk turning back the clock on gains made in <a href="https://theconversation.com/why-100-years-without-slum-housing-in-australia-is-coming-to-an-end-64153">improving</a> urban liveability. This will further stretch the embattled social service sector and the capacity of governments to ensure community resilience. </p>
<p>A key aspect of resilience is lowering the gap between rich and poor, recognising that people and communities recover better if they can <a href="https://theconversation.com/top-down-disaster-resilience-doesnt-work-the-national-recovery-and-resilience-agency-must-have-community-at-its-heart-160363">work together</a>. </p>
<p>So any action we take needs to be focused on social equity and involve coordination across the three tiers of government. </p>
<p>Planning needs to respond to the relationship between disasters, housing, and insurance. </p>
<p>This includes a systematic and equitable effort to relocate communities out of high-risk areas. It means protecting ecosystems that in turn help to protect communities. </p>
<p>It also means ensuring new housing is safe, affordable, insurable and located in safe places, designed to withstand local risks.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/underinsurance-is-entrenching-poverty-as-the-vulnerable-are-hit-hardest-by-disasters-152083">Underinsurance is entrenching poverty as the vulnerable are hit hardest by disasters</a>
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<img src="https://counter.theconversation.com/content/203753/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kate Booth has received funding from the Australian Research Council (DP170100096). She is a member of the Planning Institute of Australia. </span></em></p>
The housing crisis coupled with climate change could see more people living in the kinds of shanty towns and tent cities seen around the time of the Great Depression.
Kate Booth, Associate Professor of Human Geography, University of Tasmania
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/203037
2023-04-07T13:48:03Z
2023-04-07T13:48:03Z
Millions of Americans at risk of losing free preventive care after Texas ruling on ACA
<figure><img src="https://images.theconversation.com/files/519403/original/file-20230404-473-pq24if.jpg?ixlib=rb-1.1.0&rect=19%2C0%2C2121%2C1406&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Raising the cost barriers for health care will harm the most vulnerable patients.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/mother-talking-with-daughter-while-male-doctor-royalty-free-image/1321467310">Maskot via Getty Images</a></span></figcaption></figure><p>Many Americans breathed a sigh of relief when the Supreme Court left the Affordable Care Act in place following the law’s <a href="https://www.supremecourt.gov/opinions/20pdf/19-840_6jfm.pdf">third major legal challenge</a> in June 2021. This decision left <a href="https://source.wustl.edu/2017/02/americans-divided-on-obamacare-repeal-poll-finds/">widely supported policies</a> in place, like ensuring coverage <a href="https://www.healthcare.gov/coverage/pre-existing-conditions/">regardless of preexisting conditions</a>, granting coverage for <a href="https://www.healthcare.gov/young-adults/children-under-26/">dependents up to age 26</a> on their parents’ plan and removing <a href="https://www.healthcare.gov/health-care-law-protections/lifetime-and-yearly-limits/">annual and lifetime benefit limits</a>.</p>
<p>But now, millions of people in the U.S. are holding their breath again <a href="https://storage.courtlistener.com/recap/gov.uscourts.txnd.330381/gov.uscourts.txnd.330381.114.0_1.pdf">following a March 30, 2023 ruling</a> in Braidwood v. Becerra that would <a href="https://www.healthaffairs.org/content/forefront/texas-judge-just-invalidated-preventive-services-mandate-happens-next">eliminate free coverage</a> for many basic preventive care services and medications.</p>
<h2>Litigating preventive care</h2>
<p><a href="https://www.law.cornell.edu/cfr/text/29/2590.715-2713">Section 2713</a> of the ACA requires insurers to offer <a href="https://www.healthcare.gov/coverage/preventive-care-benefits/">full coverage of preventive services</a> endorsed by one of three federal groups: the U.S. Preventive Services Task Force, the Advisory Committee on Immunization Practices or the Health Resources and Services Administration. If one of those groups recommends a preventive care service as essential to good health outcomes, then you shouldn’t have to pay anything out of pocket. For example, <a href="https://www.congress.gov/bill/116th-congress/house-bill/748/">the CARES Act</a>, which allocated emergency funding in response to the COVID-19 pandemic, used this provision to ensure COVID-19 vaccines would be free for many Americans.</p>
<p>Immunizations, including COVID-19 vaccines, require a recommendation from the <a href="https://www.cdc.gov/vaccines/acip/index.html">Advisory Committee on Immunization Practices</a> of the Centers for Disease Control and Prevention, while women’s health services require approval from the <a href="https://www.hrsa.gov/womens-guidelines/index.html">Health Resources and Services Administration</a>. Most other preventive services require an A or B rating from the <a href="https://uspreventiveservicestaskforce.org/uspstf/home">U.S. Preventive Services Task Force</a>, an independent body of experts trained in research methods, statistics and medicine, and supported by the <a href="https://www.ahrq.gov/cpi/about/otherwebsites/uspstf/index.html">Agency for Healthcare Research and Quality</a>.</p>
<p>The lead plaintiff in the ACA case, <a href="https://khn.org/news/article/braidwood-becerra-aca-preventive-services-court-decision-reed-oconnor/">Braidwood Management</a>, is a Christian for-profit corporation owned by Steven Hotze, a physician and conservative activist who has <a href="https://www.texastribune.org/2013/05/15/republican-donor-releases-songs-opposing-obamacare/">previously filed</a> multiple lawsuits against the Affordable Care Act. Braidwood and its co-plaintiffs, a group of conservative Christian employers, objected to being forced to provide their 70 employees free access to pre-exposure prophylaxis, or PrEP, a medicine that is <a href="https://www.cdc.gov/hiv/basics/prep/prep-effectiveness.html">nearly 100% effective</a> in preventing HIV infection. Hotze claimed that PrEP “facilitates and encourages homosexual behavior, intravenous drug use and sexual activity outside of marriage between one man and one woman,” despite a lack of evidence to support this. He also claimed that his religious beliefs prevent him from providing insurance that covers PrEP.</p>
<p>PrEP received an <a href="https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/prevention-of-human-immunodeficiency-virus-hiv-infection-pre-exposure-prophylaxis">A rating</a> from the U.S. Preventive Services Task Force in June 2019, paving the way for it to be covered at no cost for millions of people. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Red ribbon hanging from the North Portico of the White House" src="https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=408&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=408&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=408&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434528/original/file-20211129-19-1jm1jvh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">PrEP is a key tool to helping the U.S. reach its goal of substantially reducing new HIV infections by 2030.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/ObamaWorldAidsDay/c146dee7e944420482f3e5786d4d2e50">AP Photo/Pablo Martinez Monsivais</a></span>
</figcaption>
</figure>
<p>Though Section 2713 of the ACA <a href="https://doi.org/10.1016/j.ypmed.2021.106690">doesn’t work perfectly</a>, sometimes leaving patients frustrated by <a href="https://www.washingtonpost.com/national/health-science/getting-charged-for-free-preventive-care/2014/01/17/98fbd1fa-7ec2-11e3-95c6-0a7aa80874bc_story.html">unexpected bills</a>, it has made a huge difference in reducing costs for services like <a href="https://doi.org/10.1001/jamanetworkopen.2021.1248">well-child visits</a> and <a href="https://doi.org/10.1097/MLR.0000000000000610">mammograms</a>, just to name a few.</p>
<p><a href="https://aspe.hhs.gov/sites/default/files/documents/786fa55a84e7e3833961933124d70dd2/preventive-services-ib-2022.pdf">Over 150 million Americans</a> are enrolled in private health insurance, allowing them to benefit from free preventive care, with <a href="https://www.healthsystemtracker.org/brief/preventive-services-use-among-people-with-private-insurance-coverage/">about 60%</a> using at least one free preventive service each year. Raising the cost barrier again for PrEP, for example, would <a href="https://doi.org/10.1001/jamanetworkopen.2021.22692">disproportionately harm</a> younger patients, people of color and those with lower incomes.</p>
<p>As public health researchers at <a href="https://www.bu.edu/sph/profile/paul-shafer/">Boston University</a> and <a href="https://sph.tulane.edu/sbps/kristefer-stojanovski-phd-mph">Tulane University</a> who study <a href="https://scholar.google.com/citations?user=bDT820kAAAAJ&hl=en">health insurance</a> and <a href="https://www.researchgate.net/profile/Kristefer-Stojanovski-2">sexual health</a>, we believe that prevention and health equity in the U.S. stand to take a big step backward with this policy in jeopardy.</p>
<h2>What preventive services are affected?</h2>
<p>The ruling in Braidwood rests in large part on the <a href="https://www.law.cornell.edu/constitution/articleii">appointments clause</a> of the U.S. Constitution, which specifies that certain governmental positions require presidential appointment and Senate confirmation, while other positions have a lower bar. </p>
<p>Texas federal <a href="https://www.healthaffairs.org/content/forefront/texas-judge-just-invalidated-preventive-services-mandate-happens-next">District Judge Reed O'Connor ruled</a> that because the U.S. Preventive Services Task Force is an independent volunteer panel and not made up of officers of the U.S. government, they do not have the appropriate authority to make decisions about which preventive care should be free, unlike the Advisory Committee on Immunization Practices or Health Resources and Services Administration. O'Connor also ruled that being forced to cover PrEP violated the religious freedom of the plaintiffs.</p>
<p>Following his initial ruling in September, both sides submitted briefs that tried to inform the “remedy,” or solution, the judge would ultimately recommend. He could have chosen, as the <a href="https://storage.courtlistener.com/recap/gov.uscourts.txnd.330381/gov.uscourts.txnd.330381.112.0_3.pdf">federal government advocated</a>, to grant only the plaintiffs an exemption from covering PrEP under the Religious Freedom Restoration Act. But O'Connor instead chose to make his “remedy” apply nationally and cover more services.</p>
<p>He invalidated all of the task force’s recommendations since the Affordable Care Act was passed in March 2010, returning the power to insurers and employers to decide which, if any, preventive care would remain free to patients in their plans. A few of the <a href="https://www.bloomberg.com/opinion/articles/2023-04-01/braidwood-ruling-further-weakens-aca-on-prep-drugs-preventive-care">recommendations covered by his ruling</a> include PrEP; blood pressure, diabetes, lung and skin cancer screenings; and medications to lower cholesterol and reduce breast cancer risk. As of 2022, <a href="https://www.commonwealthfund.org/blog/2022/aca-preventive-services-benefit-jeopardy-what-can-states-do">15 states</a> have laws with ACA-like requirements for plans in the insurance marketplace, but not for large employer plans generally <a href="https://blog.petrieflom.law.harvard.edu/2023/04/03/three-reactions-to-braidwood-v-becerra/">exempt from state oversight</a>.</p>
<p>Insurance contracts are typically defined by calendar year, so most people will <a href="https://www.kff.org/policy-watch/qa-implications-of-the-ruling-on-the-acas-preventive-services-requirement/">see these changes</a> starting only in 2024. Importantly, these services will likely still need to be covered by health insurance plans as <a href="https://www.law.cornell.edu/uscode/text/42/18022">essential health benefits</a> through a separate provision of the ACA – they just won’t be free anymore. </p>
<p>Other U.S. Preventive Services Task Force recommendations and those made by the Advisory Committee on Immunization Practices or Health Resources and Services Administration – namely, immunizations and contraception, respectively – will remain free to patients <a href="https://www.kff.org/womens-health-policy/issue-brief/explaining-litigation-challenging-the-acas-preventive-services-requirements-braidwood-management-inc-v-becerra/">for now</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Demonstrator holds a sign saying 'Save the ACA' in front of the U.S. Supreme Court." src="https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/419002/original/file-20210902-19-azgfs0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Affordable Care Act has faced many legal challenges over the years.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/SupremeCourtHealthCare/af7a18ea1fc84b39af301fa84aec0672">AP Photo/Alex Brandon</a></span>
</figcaption>
</figure>
<h2>What’s next?</h2>
<p>The <a href="https://storage.courtlistener.com/recap/gov.uscourts.txnd.330381/gov.uscourts.txnd.330381.115.0.pdf">federal government appealed</a> the ruling to the 5th U.S. Circuit Court of Appeals on March 31, 2023, buoyed by a <a href="https://newsroom.heart.org/news/23-national-health-organizations-respond-to-braidwood-v-becerra-ruling-that-threatens-no-cost-preventive-care">coordinated response</a> from 23 patient advocacy groups. They have asked for a stay while the case continues, which pauses the effects of the ruling. If either O'Connor or a higher court grants their request, it will leave the status quo of free preventive care in place. </p>
<p>But there are also concerns that either the 5th Circuit orthe Supreme Court could take the ruling even further, endangering the free coverage of contraception and other preventive care that remains in place. </p>
<p>The ending to this case may still be several years off, with <a href="https://news.yahoo.com/americans-surprise-medical-bills-health-care-loopholes-131630868.html">even more frustration</a> ahead as the courts undermine national goals in <a href="https://www.whitehouse.gov/cancermoonshot/">fighting cancer</a>, <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/10/31/a-proclamation-on-national-diabetes-month-2022/">diabetes</a> and <a href="https://www.cdc.gov/endhiv/index.html">ending the HIV epidemic</a>.</p>
<p><em>Portions of this article originally appeared in previous articles published on <a href="https://theconversation.com/the-next-attack-on-the-affordable-care-act-may-cost-you-free-preventive-health-care-166087">Sept. 7, 2021</a>, <a href="https://theconversation.com/hiv-prevention-pill-prep-is-now-free-under-most-insurance-plans-but-the-latest-challenge-to-the-affordable-care-act-puts-this-benefit-at-risk-171086">Dec. 1, 2021</a>, and <a href="https://theconversation.com/free-preventive-care-under-the-aca-is-under-threat-again-a-ruling-exempting-prep-from-insurance-coverage-may-extend-nationwide-and-to-other-health-services-190317">Sept. 13, 2022</a>.</em></p><img src="https://counter.theconversation.com/content/203037/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Shafer has received funding in the past three years from the Commonwealth Fund, Arnold Ventures, Robert Wood Johnson Foundation, Kate B. Reynolds Charitable Trust, Starbucks Coffee Company, and Renova Health.</span></em></p><p class="fine-print"><em><span>Kristefer Stojanovski does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
On the basis of government appointment technicalities and religious freedom, Americans may lose free coverage for cancer and blood pressure screenings, HIV prevention medication and other essential services.
Paul Shafer, Assistant Professor of Health Law, Policy and Management, Boston University
Kristefer Stojanovski, Research Assistant Professor of Social, Behavioral and Population Sciences, Tulane University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/202326
2023-03-26T19:14:20Z
2023-03-26T19:14:20Z
How and where we build needs to change in the face of more extreme weather – the insurance industry can help
<figure><img src="https://images.theconversation.com/files/517097/original/file-20230323-18-at7c1o.jpg?ixlib=rb-1.1.0&rect=0%2C54%2C4056%2C2629&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>As New Zealand considers how to better prepare for a future affected by climate change, the insurance sector needs to be part the discussion on where and how we build our homes. </p>
<p>This involvement should include input into future building standards. Insurers should also play a key role in deciding which areas of New Zealand are removed from residential use – aka red-zoned – and when this red-zoning should occur.</p>
<p>If insurers are not involved in the discussions on how the country adapts to climate change, we risk whole sections of the country becoming uninsurable. </p>
<h2>Frequent disasters make homes uninsurable</h2>
<p>It is clear the risk of damage from climate change has increased in recent years. In late January and early February, large swathes of the North Island were hit by damaging weather systems that left <a href="https://www.nzherald.co.nz/nz/cyclone-gabrielle-auckland-floods-750-properties-red-stickered-in-north-island-as-building-assessments-continue/YATIVISQTVE5JPVBLMTR6AOUBM/#:%7E:text=Cyclone%20Gabrielle%2C%20Auckland%20floods%3A%20750,building%20assessments%20continue%20%2D%20NZ%20Herald">750 homes red stickered</a> – meaning entry to the property was prohibited. Thousands more need significant repair. </p>
<p>Over the past few years, insurers have responded to the increasing risks by raising premiums in general or suggesting that clients at more risk increase their excesses. Insurers have also begun to charge premiums based on <a href="https://anziif.com/professional-development/the-journal/volume-43/issue-1/risk-based-pricing-the-new-normal">individual property risk</a>. </p>
<p>As the threat of natural disaster increases, insurers will have no choice but to raise some clients’ premiums to unaffordable levels or withdrew the offer of insurance all together.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/landslides-and-law-cyclone-gabrielle-raises-serious-questions-about-where-weve-been-allowed-to-build-200250">Landslides and law: Cyclone Gabrielle raises serious questions about where we've been allowed to build</a>
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</em>
</p>
<hr>
<p>The general rule of thumb is that any event which occurs once every 30 years will make a property uninsurable. Some areas of New Zealand, like the East Coast or Edgecumbe, are well past that in terms of the frequency of natural disasters. Cover in these areas is only provided as a public relations gesture. </p>
<p>But as the risk of a significant event increases, the companies that guarantee retail insurers for the most extreme events – known in the business as reinsurers – could force the withdrawal of all cover in some areas. These reinsurers could decide that some parts of New Zealand are simply too risky. </p>
<h2>A threat to home ownership</h2>
<p>This decision to pull out of certain areas will have a negative effect on home ownership. Banks routinely require a house to be <a href="https://www.settled.govt.nz/blog/what-property-buyers-need-to-know-about-insurance/">insurable before considering a mortgage</a>. Banks also consider whether a house will be insured for the entire length of the home loan. </p>
<p>The difficulty here is that areas which are currently low risk could become high risk in the future thanks to climate change. This rising risk is likely to lead to a situation where insurers will be forced to withdraw cover from clients who still have decades left on their mortgages. </p>
<p>Alternatively, if a property is currently insured but is likely to become uninsurable during the lifetime of a mortgage, banks may become very conservative in issuing home loans to areas they consider risky. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/517102/original/file-20230323-22-6x0q6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/517102/original/file-20230323-22-6x0q6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/517102/original/file-20230323-22-6x0q6p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/517102/original/file-20230323-22-6x0q6p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/517102/original/file-20230323-22-6x0q6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/517102/original/file-20230323-22-6x0q6p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/517102/original/file-20230323-22-6x0q6p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Where and how we build has been put under the spotlight after recent extreme weather events.</span>
<span class="attribution"><span class="source">Chris Cameron/Getty Images</span></span>
</figcaption>
</figure>
<p>An additional problem is that council consents for housing have been based on statistics of past climate events – set at a one-in-a-hundred or one-in-two-hundred year level. As we have recently seen, climate change makes these statistics dubious. </p>
<p>Instead, consents need to be based on multiple scenarios, given the various potential climate futures. New Zealand needs to determine clearly which areas are likely to be affected and plan ahead. </p>
<h2>A role for insurers</h2>
<p>The best path forward would be to establish a multi-disciplinary expert group that includes members of the insurance industry and reinsurers, to create a set of criteria and scenarios for housing development. </p>
<p>This group could set the guidelines councils use to determine if a rural area should be opened to new housing development, for example, or if an existing housing area should be red-zoned, with houses removed at a definite future date. </p>
<p>By including insurers, new building standards could be set so that homes better withstand climate change, improving the likelihood of them being insured. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/with-seas-rising-and-storms-surging-who-will-pay-for-new-zealands-most-vulnerable-coastal-properties-163807">With seas rising and storms surging, who will pay for New Zealand’s most vulnerable coastal properties?</a>
</strong>
</em>
</p>
<hr>
<p>Insurers could then be required to use the mutually agreed criteria to set risk-based premiums. If all insurers use the same criteria, then competition would be based on price and service, and not hidden risk models. </p>
<p>The risk models which insurers create, based on those criteria and the climate scenarios, could be open to public debate. The pricing attached to the risk factors could be flexible as climate change makes some areas higher risk. </p>
<h2>A dynamic understanding of risk</h2>
<p>In the end, red-zoning needs to be seen as dynamic rather than static. There needs to be the option to withdraw insurance coverage in the future, based on evolving models of climate change risk. And all potential risks need to be clearly communicated to potential buyers though land information memorandum (<a href="https://www.settled.govt.nz/blog/what-is-a-lim-report/">LIM</a>) reports. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/climate-change-is-already-putting-the-heat-on-insurance-companies-aucklands-floods-could-be-a-turning-point-198764">Climate change is already putting the heat on insurance companies – Auckland's floods could be a turning point</a>
</strong>
</em>
</p>
<hr>
<p>Taking this collaborative and transparent approach would mean insurers could be required to guarantee an offer of insurance renewal for a fixed number of years, allowing buyers to match the length of their insurance to their mortgage term. </p>
<p>The role of <a href="https://www.eqc.govt.nz/">EQC</a> or the reinsurers would be to back these fixed-term insurance policies in the case of significant disasters. </p>
<p>Working with the insurance industry would offer a level of certainty as we face an uncertain future – helping New Zealanders protect their homes in the face of changing risks.</p><img src="https://counter.theconversation.com/content/202326/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Naylor does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
The insurance industry should be involved in planning for future disasters and resilience, before some parts of New Zealand become uninsurable – leaving mortgage holders and banks exposed.
Michael Naylor, Senior Lecturer in Economics, Massey University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/202091
2023-03-21T12:42:06Z
2023-03-21T12:42:06Z
What does ‘moral hazard’ mean? A scholar of financial regulation explains why it’s risky for the government to rescue banks
<figure><img src="https://images.theconversation.com/files/516117/original/file-20230317-2226-3xknih.jpg?ixlib=rb-1.1.0&rect=41%2C8%2C5425%2C2824&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A real payload.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/yellow-bulldozer-making-its-way-through-piles-of-royalty-free-image/1346182557?phrase=money%20shovel&adppopup=true">tiero/iStock via Getty Images Plus</a></span></figcaption></figure><p>“<a href="https://www.investopedia.com/terms/m/moralhazard.asp">Moral hazard</a>” refers to the risks that someone or something becomes more inclined to take because they have reason to believe that an insurer will cover the costs of any damages. </p>
<p>The concept describes financial recklessness. It has its roots in the <a href="https://www.museumoflondon.org.uk/discover/how-great-fire-london-created-insurance">advent of private insurance companies</a> about 350 years ago. Soon after they began to form, it became clear that people who bought insurance policies <a href="https://doi.org/10.1111/j.1539-6975.2011.01448.x">took risks they wouldn’t have taken without that coverage</a>.</p>
<p>Here are some illustrative examples: Having worker’s compensation insurance could potentially encourage some workers to stay out of work longer than needed for their health. Or, homeowners insurance may explain why a homeowner might not bother spending their own money on a small repair not covered by their insurance policy because they figure that over time it will turn into a larger problem that would be covered.</p>
<p>Or think of what happens when someone rents a car and parks it where it can easily be damaged. That carelessness reflects an assumption that the rental car company’s insurance policy will pay for the repairs.</p>
<h2>Why moral hazard matters</h2>
<p>U.S. banks are insured by the <a href="https://www.fdic.gov/resources/deposit-insurance/deposit-insurance-fund/">Federal Deposit Insurance Corporation</a>, or FDIC, and the risk-takers are both banks and the bank’s depositors. </p>
<p>Congress established the FDIC during the Great Depression, which <a href="https://www.fdic.gov/bank/historical/firstfifty/chapter1.pdf">began with a spate of bank runs</a>. The goal was to boost confidence in the banking system.</p>
<p>The <a href="https://www.govinfo.gov/content/pkg/PLAW-111publ203/html/PLAW-111publ203.htm">Dodd-Frank Financial Reform Act</a>, enacted after the 2008 financial crisis, was <a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20161215a.htm">supposed to reduce moral hazard</a>. One way it did that was by making it clear that accounts of more than US$250,000 aren’t insured by the FDIC unless the bank’s failure presents a <a href="https://www.govinfo.gov/content/pkg/USCODE-2021-title12/pdf/USCODE-2021-title12-chap53-subchapI-partC-sec5365.pdf">systemic risk</a> to the financial system. </p>
<p>The implicit assumption behind the government’s insurance limit, which <a href="https://www.frbsf.org/education/publications/doctor-econ/2007/september/fdic-deposit-insurance/">prior to 2008 stood at $100,000</a>, is that depositors who have accounts worth more than the limit will bear the loss of bank failure along with the bank’s executives and shareholders. Yet boosting the size of the guarantee amount also made future bank bailouts more costly, which in turn increased moral hazard. </p>
<p>And when <a href="https://theconversation.com/us/topics/silicon-valley-bank-135407">Silicon Valley Bank</a> failed in March 2023, all its depositors <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.html">got access to their funds</a> – including those with accounts that exceeded the $250,000 limit – because the government made an exception.</p>
<h2>‘Too big to fail’</h2>
<p>I teach and <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1400840">write about moral hazard in the banking industry</a>
as a banking law professor. As it happens, my banking law class had discussed moral hazard and bank failure for three class sessions held before the 2023 spring break. </p>
<p>When the students returned from their vacation, news of Silicon Valley Bank’s failure appeared to be the start of what might become a bank crisis.</p>
<p>“What happened? It’s completely different from what you taught us!” the students in my class exclaimed, almost in unison. Questions tumbled from their heads demanding an explanation. </p>
<p>Why did the government apparently throw out concerns about moral hazard when SVB failed?</p>
<p>Any explanation would have to begin with what moral hazard can mean in the context of banking, which can summon the colloquial phrase “<a href="https://www.investopedia.com/terms/t/too-big-to-fail.asp">too big to fail</a>.” </p>
<p>That controversial concept applies to how the government responds in the aftermath of the risky behavior of a bank – if the collapse of the bank is likely to harm the economy. Yet, in reducing the risk of a widespread financial crisis, the government can end up sending the message that it’s willing to protect banks that engage in reckless behavior – and to shield their customers from the consequences.</p><img src="https://counter.theconversation.com/content/202091/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Jones Havard does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
The failure of Silicon Valley Bank has raised questions about some of the consequences when the government steps in to protect the depositors of troubled banks.
Cassandra Jones Havard, Professor of Law, University of South Carolina
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/199104
2023-02-26T19:04:23Z
2023-02-26T19:04:23Z
What is trauma insurance and what do I need to know if I am considering getting it?
<figure><img src="https://images.theconversation.com/files/509999/original/file-20230214-22-o9aoil.jpg?ixlib=rb-1.1.0&rect=0%2C18%2C4033%2C2113&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.pexels.com/photo/short-haired-sick-asian-woman-opening-curtains-of-windows-in-hospital-6798569/">Photo by Michelle Leman/Pexels</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Trauma insurance (also known as crisis cover or critical illness insurance) is not a widely understood cover. Many people <a href="https://www.griffith.edu.au/__data/assets/pdf_file/0030/295770/FPRJ-V4-ISS1-pp-53-75-insurance-literacy-in-australia.pdf">don’t even know</a> it exists.</p>
<p>So, what is trauma insurance, when does it pay out and how is it different to private health insurance? </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-is-income-protection-insurance-and-hows-it-different-to-total-and-permanent-disability-insurance-193535">What is income protection insurance – and how's it different to total and permanent disability insurance?</a>
</strong>
</em>
</p>
<hr>
<h2>A lump sum for life-threatening medical conditions</h2>
<p>Trauma insurance provides a benefit for life-threatening medical conditions that seriously compromise the insured person’s current and future quality of life. </p>
<p><a href="https://www.canstar.com.au/life-insurance/trauma-insurance/">Examples</a> of major trauma medical conditions include:</p>
<ul>
<li>cardiovascular conditions</li>
<li>cancer</li>
<li>stroke and</li>
<li>kidney failure.</li>
</ul>
<p>So the word trauma here doesn’t refer to what you might usually think of as traumatising events, such as a car accident or abuse. Rather, it refers to specific life-threatening medical conditions. </p>
<p>The exact conditions covered will vary from policy to policy and are always defined in the policy document – so make sure you read it carefully.</p>
<p>The payout received from this cover ideally should be enough to pay off the mortgage (if you have one), with money left over for medical expenses, rehabilitation and any living expenses. </p>
<p>The amount you get will depend on your policy and your circumstances but could be in the <a href="https://www.finder.com.au/how-much-trauma-insurance-do-i-need#:%7E:text=The%20average%20trauma%20insurance%20policy,both%20you%20and%20your%20family.">hundreds of thousands</a> or even <a href="https://www.nobleoak.com.au/trauma-insurance/faqs-trauma/#:%7E:text=Trauma%20Insurance%20can%20provide%20a,at%20the%20time%20of%20Application">millions</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&rect=0%2C9%2C6134%2C4065&q=45&auto=format&w=1000&fit=clip"><img alt="A cancer patient looks out the window." src="https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&rect=0%2C9%2C6134%2C4065&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/509994/original/file-20230214-22-1avuqu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The exact conditions covered will vary from policy to policy.</span>
</figcaption>
</figure>
<h2>When can you make a trauma insurance claim?</h2>
<p>To be able to make a trauma insurance claim, the insured person does not have to die or be permanently disabled by severe medical trauma.</p>
<p>Instead, the benefit amount is payable if one of the “medical events” you’re insured against – a stroke, for example – occurs. However, you only get the payout if the definition of that event in your trauma insurance policy is satisfied.</p>
<p>It is important to understand what is covered and what is not.</p>
<p>Some insurance companies cover more than <a href="https://books.google.com.au/books/about/Guide_to_Life_Risk_Protection_and_Planni.html?id=H8IYkwEACAAJ&redir_esc=y">30 conditions</a>, but some limit themselves to just a few major ones.</p>
<h2>So how is trauma insurance different to other types of insurance?</h2>
<p>Trauma insurance pays a lump sum when a person becomes critically ill or injured. That’s regardless of whether or not the insured person can still work or will be able to work in future.</p>
<p>Unlike total and permanent disability insurance, the insured person does not need to be totally and permanently disabled.</p>
<p>Income protection insurance usually pays a percentage of the insured person’s income, so they can sustain the quality of life they had before illness or disability. Trauma insurance, on the other hand, pays out a lump sum.</p>
<p>And unlike trauma insurance, both total and permanent disability and income protection insurances can be purchased within a <a href="https://www.choice.com.au/money/financial-planning-and-investing/superannuation/buying-guides/insurance-in-super">superannuation account</a>. Superannuation funds are <a href="https://www.superguide.com.au/comparing-super-funds/insurance-super">not permitted</a> to offer trauma insurance, so if you want trauma insurance you have to pay for this cover from your own pocket.</p>
<p><a href="https://www.griffith.edu.au/__data/assets/pdf_file/0030/295770/FPRJ-V4-ISS1-pp-53-75-insurance-literacy-in-australia.pdf">Research</a> interviews I conducted with financial advisers and consumers revealed most people who see financial advisers do not know much about trauma insurance. In fact, 25 out of 40 (63%) consumers I interviewed said they had never heard of it. </p>
<p>Some of the consumers I spoke to were confused about the difference between trauma insurance and private health insurance. Many thought they were very similar, if not the same.</p>
<p>Many people do not realise private health insurance pays only for a hospital stay (and, if you have extras cover, may reduce the cost of certain non-hospital treatments). It doesn’t cover ongoing living costs. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A woman looks at the fine print." src="https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/510265/original/file-20230215-23-3v4rtc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Always read the fine print.</span>
<span class="attribution"><a class="source" href="https://www.pexels.com/photo/photo-of-woman-wearing-denim-jeans-4100294/">Photo by Matilda Wormwood/Pexels</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Important things to check before you buy trauma insurance</h2>
<p>Most trauma insurance policies have a waiting period before you can claim anything (usually about 90 days).</p>
<p>Importantly, most self-inflicted injuries or illnesses will not be covered by the majority of trauma policies.</p>
<p>Death or disability caused by attempted suicide usually has a waiting period of 13 months, after which, in most cases, the insurer will pay out. If you die by suicide then your next of kin will get the lump sum.</p>
<p>Any pre-existing medical conditions must be disclosed at the time of application; the insurer may choose to exclude those conditions or apply a loading (which makes premiums more expensive). </p>
<p>If pre-existing conditions are not disclosed at the start, you run the risk of particular claims being rejected in future.</p>
<p>Trauma insurance does not cover <a href="https://moneysmart.gov.au/how-life-insurance-works/trauma-insurance">mental health conditions</a>. This is probably due to the fact people who claim for a mental health condition are <a href="https://fsc.org.au/resources/2235-fsc-kpmg-mental-health-analysis-summary-report-june-2021/file">likely</a> to claim again.</p>
<p>If you’ve got or are considering getting trauma insurance, make sure you check the definitions of what it covers, as well as the specific inclusions and exclusions.</p>
<p>Trauma insurance is relatively expensive. That’s chiefly because the possibility of a claim is higher than many other types of personal insurance.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A person does walking rehab exercises." src="https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/510267/original/file-20230215-26-isvwp0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The payout received ideally should be enough to cover things like mortgage, medical expenses and rehabilitation.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Possible peace of mind</h2>
<p>Overall, trauma insurance is expensive but may offer some people peace of mind they will have the money needed to pay privately for medical expenses and treatments if a serious medical event strikes.</p>
<p>If the cover is high enough to pay off a person’s outstanding debts, this may take the financial pressure away so they can concentrate on recovering from illness.</p>
<p>This will also reduce the financial burden on the government, as the insured person will not need to claim any payments from Centrelink.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-switch-health-insurers-if-youre-worried-about-cybersecurity-costs-or-claims-194248">How to switch health insurers if you're worried about cybersecurity, costs or claims</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/199104/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tania Driver does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Trauma insurance provides a benefit for life-threatening medical conditions that seriously compromise the insured person’s current and future quality of life.
Tania Driver, Lecturer in Financial Planning, James Cook University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/199106
2023-02-04T13:35:05Z
2023-02-04T13:35:05Z
Robberies surge as criminals take advantage of South Africa’s power outages
<figure><img src="https://images.theconversation.com/files/507867/original/file-20230202-7334-5x6ocd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">AFP via Getty Images</span></span></figcaption></figure><p>The acute energy crisis in South Africa has adversely affected all aspects of the society. Regular and lengthy power outages – which started <a href="https://www.eskom.co.za/heritage/history-in-decades/eskom-2003-2012/#:%7E:text=His%20low%2Dkey%20approach%20came,the%20integrity%20of%20the%20grid">in 2007</a> are also contributing to an escalation in the levels of criminal activity, especially street crime. The most recent <a href="https://www.saps.gov.za/services/crimestats.php">quarterly crime statistics</a> – have undermined an <a href="https://mg.co.za/business/2023-01-21-blackouts-add-to-risk-of-recession/">ailing economy</a> and <a href="https://www.citizen.co.za/news/south-africa/load-shedding-impacting-food-security-sa/">food security</a>, as well as <a href="https://www.gov.za/speeches/statement-minister-health-impact-loadshedding-provision-healthcare-services-and">health</a> and <a href="https://www.news24.com/news24/southafrica/news/education-sector-concerned-as-impact-of-load-shedding-cuts-down-valuable-teaching-studying-time-20220920#:%7E:text=%22Load%20shedding%20is%20disruptive%20to,reliant%20on%20technology%2C%20said%20Cembi.">educational</a> outcomes.</p>
<p>It has become evident that power cuts added to a significant increase in all robbery categories – for July to September 2022 – compared to the same period in 2021. This corresponded with the most severe power cuts the country had ever experienced.</p>
<p>In addition, the police service’s <a href="https://www.saps.gov.za/services/downloads/Annual-Crime-2021_2022-web.pdf">annual crime data</a> for the period 2012/13-2021/22 shows there was a spike in robberies in 2015. This was a year of <a href="https://mybroadband.co.za/news/energy/470217-scary-load-shedding-statistic-revealed.html">more power cuts</a> (35 days) than previous years.</p>
<p>Based on claims data, <a href="https://businesstech.co.za/news/energy/626974/increase-in-home-break-ins-during-longer-load-shedding-periods/">insurance companies</a> are suggesting a strong link between power cuts and property crime in wealthier areas. In addition, a growing number of <a href="https://www.timeslive.co.za/news/south-africa/2022-07-08-load-shedding-worsens-crimes-in-communities-cpfs/">reports</a> from both rich and poor parts of the country link power cuts to increases in interpersonal crime, particularly <a href="https://www.dailymaverick.co.za/article/2022-07-06-criminals-are-enjoying-load-shedding-say-cape-town-communities-affected-by-crime/">robberies</a>.</p>
<p>The <a href="https://sandtonchronicle.co.za/317525/stay-alert-with-these-load-shedding-safety-tips/">police</a> and the <a href="https://www.youtube.com/watch?v=gCASycCNR6M">police minister</a> have publicly linked power cuts to robbery and other crimes in recent months. </p>
<p>So, how are the power cuts contributing to increases in robberies?</p>
<p>It is not possible to provide a definitive answer to this question as no rigorous studies showing causality between power cuts and robbery occurrence in the country have been undertaken. But one can look to crime prevention and policing theory, and studies from other countries, to provide insights into the possible link between power outages and robbery. This theory advocates that power outages (the power utility, Eskom, calls these “loadshedding”) undermine crime prevention measures. This is especially so at night as these measures are largely dependent on street lighting. Power outages also undermine the effectiveness of policing as patrols and other police services are curtailed.</p>
<h2>Electricity and crime</h2>
<p>The <a href="https://www.saferspaces.org.za/understand/entry/crime-prevention-through-environmental-design-cpted">crime prevention through environmental design theory</a> is helpful.</p>
<p>It uses two principal measures – target hardening; and surveillance and visibility.</p>
<p><strong><a href="https://www.college.police.uk/guidance/neighbourhood-crime/interventions-situational-crime-prevention">Target hardening</a></strong> uses measures such as locked doors, gates, fencing, alarm systems, CCTV cameras and burglar bars in and around buildings to deter criminals. It is widely accepted in the <a href="https://www.journals.uchicago.edu/doi/abs/10.1086/449230">criminology literature</a> that target hardening has the potential to reduce the risk of home invasions and business robberies in some contexts. These measures should ideally be combined with other crime prevention interventions. </p>
<p>In South Africa, <a href="https://businesstech.co.za/news/trending/587286/how-criminals-are-taking-advantage-of-increased-load-shedding-in-south-africa/">private security companies</a> have suggested that criminals have taken advantage of the fact that many home and business security systems are compromised during power outages. </p>
<p>Yet, robberies tend to be more prevalent in <a href="https://www.routledge.com/Policing-and-Boundaries-in-a-Violent-Society-A-South-African-Case-Study/Lamb/p/book/9780367748142">poorer urban areas</a> in the country, where residents cannot afford to install such security systems. And most robberies take place in <a href="https://link.springer.com/article/10.1007/s00038-018-1129-z">public spaces</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/south-africans-are-feeling-more-insecure-do-ramaphosas-plans-add-up-176991">South Africans are feeling more insecure: do Ramaphosa's plans add up?</a>
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</p>
<hr>
<p><strong><a href="https://www.saferspaces.org.za/understand/entry/crime-prevention-through-environmental-design-cpted">Surveillance and visibility</a></strong> assumes that people are likely to be discouraged from robbing others in public spaces, where their actions will be clearly seen by others (“eyes on the street”) and they may be identified and caught by police.</p>
<p>This can include the presence of people in the area, either going about their normal daily activities or actively patrolling, and the presence of CCTV cameras. Lighting in public spaces, especially at night, is nonetheless an essential requirement for visibility and surveillance to be effective. <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1745-9133.2004.tb00058.x?casa_token=D1oCV46o9fMAAAAA:Oxla0S7kylB_6vXk0XFOSrp9M-acEsmQKTDZl1NEf9WK2Z5L-Qlp-v7xiYEZ7PCExTOoLT67suQlVzI">Studies</a> from other countries have shown that street lighting and CCTV cameras are effective in reducing robberies. </p>
<p>Power outages, particularly at night, clearly undermine visibility. This is evident from the many <a href="https://www.dailymaverick.co.za/article/2022-07-06-criminals-are-enjoying-load-shedding-say-cape-town-communities-affected-by-crime/">reports</a> of people being targeted by criminals while walking in the streets after dark.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/power-cuts-in-south-africa-are-playing-havoc-with-the-countrys-water-system-197952">Power cuts in South Africa are playing havoc with the country's water system</a>
</strong>
</em>
</p>
<hr>
<p><a href="http://wikinight.free.fr/wp-content/uploads/Securite/Securite%20des%20biens%20et%20personnes/Preventing_Crime_what_works_what_doesn_t_what_s_promising.pdf#page=227">Systematic reviews</a> of policing research have shown that regular and visible police patrols, mainly when directed at crime hot spots, are an effective crime prevention intervention. Obviously, police cannot satisfactorily patrol at night during power outages. This makes the work of South Africa’s police more <a href="https://www.businesslive.co.za/bd/national/2022-09-22-police-have-got-injured-because-of-darkness-bheki-cele-says-about-load-shedding/">dangerous</a>. </p>
<p>In response to a <a href="https://pmg.org.za/committee-question/98/">parliamentary question</a> about the impact of power outages on the work of the South African Police Service (SAPS), Bheki Cele, the police minister, responded that:</p>
<blockquote>
<p>(It) has an adverse effect on service delivery in the SAPS … on all communication and network operations, including the registering of case dockets … A number of stations cannot function at night because there are no lights … </p>
</blockquote>
<p>There have also been reports of some <a href="https://mybroadband.co.za/news/security/467675-problems-crash-10111-emergency-call-centre-in-major-city.html">police emergency call centres</a> being uncontactable during power outages.</p>
<h2>No easy solutions</h2>
<p>There are no practical short- to medium-term crime prevention alternatives for the authorities to pursue during power outages, other than exempting high crime areas from the outages. That might not be possible in such a severe <a href="https://theconversation.com/power-cuts-in-south-africa-trend-to-get-off-the-grid-is-gathering-pace-but-total-independence-is-still-a-way-off-197924">electricity crisis</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/eskom-ceo-quits-why-finding-a-new-head-for-south-africas-struggling-power-utility-wont-end-the-blackouts-196667">Eskom CEO quits: why finding a new head for South Africa's struggling power utility won't end the blackouts</a>
</strong>
</em>
</p>
<hr>
<p>One positive development has been <a href="https://www.iol.co.za/weekend-argus/news/delft-residents-take-to-the-streets-as-crime-increases-during-load-shedding-9ed50a9e-36dd-4613-ba87-c93731ce1ae7">increased community patrols</a> in some areas. Regrettably, some of this community crime prevention work has led to acts of <a href="https://www.capetalk.co.za/articles/463481/mec-urges-public-to-leave-justice-to-the-law-as-vigilante-attack-leaves-5-dead">vigilantism</a>.</p><img src="https://counter.theconversation.com/content/199106/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Guy Lamb receives funding from Norwegian Research Council, the British Academy and FCDO . He is affiliated with South Africa's National Planning Commission. </span></em></p>
Security companies suggest that criminals take advantage of the fact that many home and business security systems get compromised during power outages.
Guy Lamb, Criminologist / Senior Lecturer, Stellenbosch University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/198096
2023-01-31T17:15:09Z
2023-01-31T17:15:09Z
Six parts of your car that gather data on you
<figure><img src="https://images.theconversation.com/files/505918/original/file-20230123-7791-gznfp8.jpg?ixlib=rb-1.1.0&rect=60%2C0%2C6720%2C4466&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">New Africa/Shutterstock</span></span></figcaption></figure><p>You can tell a lot about someone from the car they drive. The data that many vehicles now collect can reveal the patterns of our daily lives and provide insights into our behaviour, actions and even our state of mind.</p>
<p><a href="https://sytech-consultants.com/the-evolution-of-vehicle-forensics/">Vehicle forensics</a> is a type of digital forensic science that focuses on the identification, acquisition and analysis of data which has been stored by cars, vans and lorries. </p>
<p>Originally, vehicle forensics mainly related to the external identification of stolen cars or tax and MOT violations by the use of the <a href="https://www.police.uk/advice/advice-and-information/rs/road-safety/automatic-number-plate-recognition-anpr/">ANPR (automatic number plate recognition) system</a> in the UK. The system was invented during the 1970s but did not become widely used by the police <a href="http://www.anpr-international.com/history-of-anpr/">until the late 1990s</a>. ANPR works by scanning number plates and checking them against a database of vehicles of interest. </p>
<p>However, in recent years, the process of prosecuting offenders has become <a href="https://www.police-foundation.org.uk/project/the-next-steps-for-digital-forensics/">more sophisticated</a> and now also encompasses the extraction of <a href="https://berla.co/discover/">data from inside vehicles</a>. From the mechanisms used to enhance the driving experience to inbuilt entertainment systems, all can assist in the detection of crime and can be <a href="https://www.inbrief.co.uk/court-proceedings/computer-evidence/">admissible as evidence in court</a>. </p>
<h2>1. The black box</h2>
<p>Black boxes are devices used within vehicles to monitor an individual’s driving skills. They are not present in every vehicle but they are <a href="https://www.confused.com/car-insurance/black-box/telematics-explained">popular with insurance companies</a>. If the data from the black box reveals a driver is performing well behind the wheel, it can be used to lower their premium. </p>
<p>Alongside recording GPS coordinates, black boxes can show how far a vehicle has travelled, how often it has been driven, as well as braking and cornering ability, for example. </p>
<h2>2. The infotainment system</h2>
<p>Listening to music while driving used to involve a simple cassette or CD player. But slowly these systems gave way to Bluetooth, wifi and USB devices, which can be operated by using touch screens or displays installed on dashboards. </p>
<p>As well as providing information and entertainment, the <a href="https://www.cazoo.co.uk/the-view/buying/what-is-a-car-infotainment-system/">infotainment system</a> is often how drivers interact with other functions of the vehicle, such as displaying how much fuel has been used and controlling how warm the seats are.</p>
<figure class="align-center ">
<img alt="Finger pressing car infotainment system screen" src="https://images.theconversation.com/files/506061/original/file-20230124-17-pev4g9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/506061/original/file-20230124-17-pev4g9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/506061/original/file-20230124-17-pev4g9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/506061/original/file-20230124-17-pev4g9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/506061/original/file-20230124-17-pev4g9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/506061/original/file-20230124-17-pev4g9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/506061/original/file-20230124-17-pev4g9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Infotainment system.</span>
<span class="attribution"><span class="source">Vladimka production/Shutterstock</span></span>
</figcaption>
</figure>
<p>When smartphones are plugged into cars or paired via Bluetooth, the infotainment system can store data such as navigation history, text messages and emails, internet browsing history and social media feeds, as well as Bluetooth and cell tower connections.</p>
<h2>3. Electronic control units</h2>
<p>Electronic control units or ECUs assist with how a vehicle works and are often described as the <a href="https://blog.halfords.com/a-complete-guide-to-engine-control-units/">“brain” of the engine</a>. They are situated within the car’s interior, usually in the glove compartment, engine space or under the dashboard. Essentially, an ECU is a computer, a switching system and a power management system housed within a very small case. </p>
<p>There are usually more than 75 ECUs in a vehicle and each one is responsible for a certain task. For example, the engine ECU controls the injection of the fuel and, in petrol engines, the timing of the spark to ignite it. Fastened seat belts, air pressure, and lights turning on and off are also all functions of ECUs.</p>
<figure class="align-center ">
<img alt="Close up of a car's engine compartment" src="https://images.theconversation.com/files/506115/original/file-20230124-1539-lprcyx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/506115/original/file-20230124-1539-lprcyx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=551&fit=crop&dpr=1 600w, https://images.theconversation.com/files/506115/original/file-20230124-1539-lprcyx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=551&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/506115/original/file-20230124-1539-lprcyx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=551&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/506115/original/file-20230124-1539-lprcyx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=692&fit=crop&dpr=1 754w, https://images.theconversation.com/files/506115/original/file-20230124-1539-lprcyx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=692&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/506115/original/file-20230124-1539-lprcyx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=692&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The electronic control unit of the car installed in the engine compartment.</span>
<span class="attribution"><span class="source">Henadzi Kilent/Shutterstock</span></span>
</figcaption>
</figure>
<p>To assist with driver efficiency, the ECUs and the infotainment system often work together, storing a wide variety of data about the ways in which a vehicle is used.</p>
<h2>4. eCall units</h2>
<p><a href="https://www.autoexpress.co.uk/car-tech/101706/what-is-ecall-automated-emergency-call-technology-explained">Emergency call, or eCall</a>, units were introduced to new vehicles across the EU and UK in 2018. This is an emergency system that aims to bring rapid assistance if and when there are road traffic incidents. Vehicle sensors can identify collisions and can detect if the airbags have been deployed. This in turn activates a call to the emergency services. </p>
<figure class="align-center ">
<img alt="Finger pressing SOS button" src="https://images.theconversation.com/files/506118/original/file-20230124-21-mpu9qm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/506118/original/file-20230124-21-mpu9qm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/506118/original/file-20230124-21-mpu9qm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/506118/original/file-20230124-21-mpu9qm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/506118/original/file-20230124-21-mpu9qm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/506118/original/file-20230124-21-mpu9qm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/506118/original/file-20230124-21-mpu9qm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A car’s manual eCall button.</span>
<span class="attribution"><span class="source">Lanski/Shutterstock</span></span>
</figcaption>
</figure>
<p>The data collected by eCall includes the vehicle’s GPS coordinates, the direction of travel, the <a href="https://www.gov.uk/vehicle-registration/vehicle-identification-number">VIN (vehicle identification number)</a>, the type of fuel used and even whether seat belts were fastened or not. </p>
<h2>5. Key fobs</h2>
<p>Beyond their most obvious function in locking and unlocking our cars, <a href="https://www.linkedin.com/pulse/car-keys-its-types-forensic-significance-iasrorg?trk=public_post-content_share-article">key fobs contain a remarkable amount of information</a>. Some of the data stored within a fob includes the VIN, the number of keys paired to a particular vehicle and the last time the vehicle was locked and unlocked.</p>
<h2>6. Cameras</h2>
<p><a href="https://www.which.co.uk/reviews/dash-cams/article/dash-cams-and-the-law-what-you-need-to-know-aUty85w5AYQC">Reverse and dashboard cameras</a> can assist with parking and provide accident footage for insurance investigators. But they can also reveal the journey travelled by the vehicle alongside date and time stamps, as well as road positioning. </p>
<p>Additionally, dash cameras can capture images of other road users and pedestrians. The <a href="https://nextbase.co.uk/national-dash-cam-safety-portal/">national dash cam safety portal</a> allows camera owners to submit footage to police forces in England and Wales, which can then be used by investigators.</p><img src="https://counter.theconversation.com/content/198096/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachael Medhurst does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Our vehicles hold a remarkable amount of information, which can be used by digital forensic investigators in the detection of crime.
Rachael Medhurst, Course Leader and Lecturer in Cyber Security NCSA, University of South Wales
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/191560
2023-01-31T06:13:07Z
2023-01-31T06:13:07Z
The sharing economy can expose you to liability risks – here’s how to protect yourself
<figure><img src="https://images.theconversation.com/files/505333/original/file-20230119-18-ivdjcl.jpg?ixlib=rb-1.1.0&rect=145%2C24%2C5222%2C3508&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/woman-sitting-back-car-smiling-getting-440912047">HTeam / Shutterstock</a></span></figcaption></figure><p>Sharing platforms have become a regular part of our lives for travel and daily needs, especially for young people. In 2018, Airbnb reported that the <a href="https://news.airbnb.com/new-data-the-airbnb-advantage/">majority of its users</a> were millennials. And with the ongoing cost of living crisis, more people may turn to these platforms as ways to save on their travel, or to make extra money by sharing their property.</p>
<p>Companies such as Airbnb and Turo (a car-sharing platform) are often more affordable and flexible than traditional hotels or car hire services. But using them can also expose you to liability risks if something goes awry. It might be tempting to assume that you are given the same <a href="https://catererlicensee.com/concerns-raised-over-airbnb-consumer-protection/">rights as a consumer</a>, but this is not the case.</p>
<p>When you hire a car through a traditional rental company, you enter a contract as a consumer and are protected under the UK’s <a href="https://www.legislation.gov.uk/ukpga/2015/15/contents/enacted">Consumer Rights Act 2015</a>. This guarantees you receive a safe and fit-for-purpose product or service, and certain rights to refunds. </p>
<p>But <a href="https://lthj.qut.edu.au/article/view/2419">on sharing platforms</a>, you are directly contracting with another consumer to provide and consume goods and services between yourselves. The sharing company simply provides an online platform to facilitate your contract. Its obligations to you are <a href="https://www.asherfergusson.com/airbnb/">limited to providing that service</a> – making its website available and processing your data (according to its privacy policy and GDPR rules).</p>
<p>Your rights and obligations on these platforms are therefore not covered by consumer protection regulations. Neither party is covered by the Consumer Rights Act, which only applies to business-to-consumer contracts.</p>
<hr>
<figure class="align-right ">
<img alt="Quarter life, a series by The Conversation" src="https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><em><strong><a href="https://theconversation.com/uk/topics/quarter-life-117947?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">This article is part of Quarter Life</a></strong>, a series about issues affecting those of us in our twenties and thirties. From the challenges of beginning a career and taking care of our mental health, to the excitement of starting a family, adopting a pet or just making friends as an adult. The articles in this series explore the questions and bring answers as we navigate this turbulent period of life.</em></p>
<p><em>You may be interested in:</em></p>
<p><em><a href="https://theconversation.com/five-things-you-can-do-to-save-energy-if-you-rent-your-home-195388?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">Five things you can do to save energy if you rent your home</a></em></p>
<p><em><a href="https://theconversation.com/spotify-wrapped-how-sharing-your-music-tastes-can-drive-feelings-of-fomo-196825?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">Spotify Wrapped: how sharing your music tastes can drive feelings of Fomo</a></em></p>
<p><em><a href="https://theconversation.com/moving-back-home-doesnt-mean-youve-failed-in-life-heres-why-187300?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">Moving back home doesn’t mean you’ve failed in life – here’s why</a></em></p>
<hr>
<p>This means that if you suffer an injury while using someone else’s property or driving their car, the platform company is not legally obliged to compensate you. Your contract is with the other user (who is renting you their home or car), and it is they who have the legal obligation to compensate you for your injury or loss. </p>
<p>Likewise, if you list your property on a sharing platform, you expose yourself to personal liability towards anyone who is injured while using your property. The same goes for damage to property. As a guest you are personally liable for damage you cause to your host’s property, and as a host you can only claim against your guests for damage they cause, not the sharing platform.</p>
<h2>Taking risks</h2>
<p>Large platforms such as Airbnb do offer <a href="https://www.airbnb.co.uk/help/?audience=guest">dispute resolution centres</a>, which coordinate such claims. This can reduce the stress and hassle of having to go through court yourself. But even so, the chances of getting full recovery for your loss is uncertain, particularly if the loss is large. </p>
<p>It is also unlikely that standard insurance can help. Most personal insurance policies do not permit you to use insured property for commercial purposes, and will invalidate your policy if you are caught doing so without permission from your insurer. The same goes for assuming that you are insured for using another person’s property.</p>
<p>For vehicles, it is <a href="https://www.legislation.gov.uk/ukpga/1988/52/section/143">illegal in the UK</a> to drive without the driver having third-party insurance. Most likely the other party will not have commercial vehicle insurance in place to cover your driving, so you run the risk of driving illegally. </p>
<p>Turo requires that hosts maintain a valid insurance policy over the vehicle <a href="https://turo.com/us/en/policies/terms#specific-terms-for-hosts">at all times</a> in accordance with UK law. Guest drivers are not required to carry their own insurance – instead, they choose one of Turo’s protection plans. These plans cover vehicle damage and third-party liability claims, with policies from a company that is authorised and regulated by the Financial Conduct Authority, Turo told The Conversation.</p>
<figure class="align-center ">
<img alt="A young woman looking distressed talks on her mobile phone in a messy, ransacked apartment" src="https://images.theconversation.com/files/505343/original/file-20230119-23-nyqqpj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505343/original/file-20230119-23-nyqqpj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505343/original/file-20230119-23-nyqqpj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505343/original/file-20230119-23-nyqqpj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505343/original/file-20230119-23-nyqqpj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505343/original/file-20230119-23-nyqqpj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505343/original/file-20230119-23-nyqqpj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">If something goes wrong when renting out your space, how do you know you are protected?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/attractive-sad-woman-talking-on-smartphone-1598495149">LightField Studios / Shutterstock</a></span>
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<p>Most major platforms will mandate third-party liability insurance. But pay attention to the excess amount, which may be much higher than your personal vehicle insurance, and can have an additional fee for processing claims. </p>
<p>For homes, you may be breaching either a term of your mortgage or your lease if you sublet on Airbnb. In the recent UK case of <a href="http://www.falcon-chambers.com/images/uploads/news/Bermondsey_Exchange_Freeholders_Limited_v_Ninos_Koumetto.pdf">Bermondsey Exchange Freeholders Ltd v Ninos Koumetto</a>, a court ruled that the tenant Airbnb host had breached the terms of his lease by subletting it. </p>
<p>Many platforms offer some sort of protection through their platforms, such as Airbnb’s <a href="https://www.airbnb.co.uk/help/article/3218">AirCover</a> for hosts and guests. But these are not the same as insurance policies, and don’t always <a href="https://www.airbnb.co.uk/help/article/2869">cover everything</a>. Airbnb’s <a href="https://www.airbnb.co.uk/help/article/937">host damage protection</a> only covers those losses not covered by another party, such as your home insurer or the <a href="https://www.airbnb.co.uk/help/article/2869">liable guest</a>. This means contacting your insurer and potentially causing it to invalidate your insurance policy if you have been sharing without the insurer’s consent.</p>
<p>In a statement, Turo told The Conversation: “Turo has made trust and safety the bedrock of our platform and our protections have consistently worked as designed.” Airbnb chose not to comment for publication. </p>
<h2>Protecting yourself</h2>
<p>Currently, sharing platforms are largely unaddressed by law and there is little regulators can do about their practices. But if you understand the risks you are taking, you can protect yourself from unpleasant surprises.</p>
<p><strong>1. Be familiar with your policies</strong></p>
<p>If your insurance specifically disallows commercial activities, get in touch with your insurer to clarify, or switch to another insurer with sharing-friendly policies. This is particularly important if you regularly use sharing platforms, as you risk both personal liability towards your guest and losing your cover for your property.</p>
<p><strong>2. Think about purchasing additional insurance</strong></p>
<p>Look for a policy that covers you specifically for these activities. This will protect you if you are injured and the other party cannot compensate you. If you cause damage to someone else’s property, you can rely on insurance instead of being personally liable.</p>
<p><strong>3. Read the terms and conditions</strong></p>
<p>While trawling through pages of legal jargon might be unappealing, it is important to know where you stand with these companies. This could be as quick as reading through the FAQs on their websites, or looking out for disclaimer and waiver clauses before you click “accept”. Platforms such as Airbnb offer region-specific <a href="https://www.airbnb.co.uk/help/article/1379">advice</a> on the laws and regulations for using their services.</p><img src="https://counter.theconversation.com/content/191560/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sally Shinan Zhu received funding from Leverhulme Trust in 2018-2021. </span></em></p>
Before you rent out your home or car, make sure you are covered.
Sally Shinan Zhu, Lecturer in Law, University of Sheffield
Licensed as Creative Commons – attribution, no derivatives.