Insuring against volcanic disaster 13 February 2010Posted by admin in natural hazards.
Tags: insurance, natural hazards, volcanic hazards, volcanoes and society
How does the insurance industry view volcanoes? As a big risk, naturally. Most volcanoes do little damage, but when volcanic damage to life and property does occur it can be extensive and long-lasting (deposits from the 1980 eruption of Mount St Helen’s, for example, are still causing problems thirty years later). How does one insure property built on or near active volcanoes (e.g. Hawaii)? Is it possible to insure against the harmful effects of volcanic emissions (e.g. Turrialba)? Can insurance offer peace of mind to the farmer fearing a scoria cone may appear in his back yard (e.g. Paricutin, or even Ballarat)? And what will be the effects upon the insurance business of a major urban centre being significantly damaged or destroyed by a volcanic eruption (e.g. Naples, Seattle and many others)?
Lloyds of London have been pondering these issues, as you might expect; and so has the insurance-industry-funded Aon Benfield UCL Hazard Research Centre. Among the conclusions reached is that while most natural disasters are usually defined by insurers as lasting no more than 72 hours, volcanic eruptions can be considered for insurance purposes as lasting up to 672 hours. Find out more by reading ‘Bubbling under – disasters waiting to happen’ at the Lloyds of London website.