David Prosser: Climate change is already costing you

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The Independent Online

If George Bush is so convinced that the US's superior technology will be able to solve problems related to climate change, it would be handy if he would lend some of it to Britain's insurance industry

While the President continues to deny the world is facing environmental disaster, Britons are already paying for the effects of global warming - through higher insurance premiums.

Home insurers have spent much of the past week desperately trying to respond to emergency claims from property owners affected by the flooding in Yorkshire. They have done a good job, as they did after the flash flood in Boscastle last year.

However, policyholders have no choice but to pay for the fact that extreme weather is increasingly common in Britain. The analyst Insuresupermarket says that living in an area at risk of flooding will raise your home insurance premium by 22 per cent.

In the worst-hit areas, most insurers now refuse to offer cover at all, other than to existing policyholders under a deal through the Association of British Insurers.

We shouldn't blame insurers for this. An ABI report last summer on climate change said that the value of weather-related claims reached £6bn between 1998 and 2003, twice the total in the previous five years.

There were 34 months of extremely hot weather in the Nineties, compared with an average of 12 in previous decades, the ABI said. At the same time, the number of winter storms in Britain has doubled over the past 50 years.

Flooding isn't the only problem for homeowners. Hot weather, such as the sweltering temperatures in much of the country this week, increases the risk of subsidence occurring in properties vulnerable to this disastrous problem. If your insurer judges your home to be at risk, expect a further premium hike.

Higher insurance costs are only the beginning of the problem. Much more serious is the potential for thousands of properties to become unsaleable. It's not impossible. Mortgage lenders will not advance money on a property if it can't be insured. So if you live in a home snubbed by insurers, no one will be able to borrow the money to buy it.

It may seem small-minded to worry about problems such as costly insurance when the impact of climate change on a global scale is potentially so awesome. But these first few warnings that all of us will be affected - and sooner than we might think - might prove to be a useful call to action.

Even if you simply start turning appliances off when you're done with them - The Independent this week revealed energy wasted on appliances left on standby could power 400,000 homes - you'll be doing your bit.

As Parliament prepares to debate the Consumer Credit Bill next week, it's crucial that MPs realise to what extent the proposed legislation lacks teeth. The Bill doesn't even require lenders to quote interest rates in a standard way, for example.

Nationwide Building Society is lobbying MPs to press for the inclusion of four new measures in the Bill - a ban on lenders allocating repayments to cheap debt; health warnings on credit-card cheques; a crackdown on risk-based interest rates; and moves to promote data sharing between lenders.

All these measures are worth supporting. One reason that consumer debt has got out of hand over the past three years - it now threatens to destabilise the economy - is that unscrupulous lenders have pulled the wool over borrowers' eyes. This is a valuable opportunity to prevent them continuing to do so.

d.prosser@independent.co.uk

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