Climate change is turning parts of Europe into an insurance nightmare

Frequent, expensive disasters are testing Europe’s ability to protect itself against the cost of global warming.

As wildfires menaced the outer suburbs of Bordeaux and Madrid this week, Europe once more faced an uncomfortable reality: a rapidly warming planet threatens to make parts of the continent uninsurable. 

The record-breaking blazes — which have forced hundreds of thousands to flee their homes, destroyed wildlife and threatened cities once thought immune to wildfire — are the latest in a series of climate-related natural disasters that are forcing policymakers to rethink how to handle the risk.

The answer, increasingly, is a brutal one: Either governments step in to protect citizens from soaring insurance premiums, straining public budgets; or people face being left with no protection at all when their homes are flooded or burn down.

The growing risk has prompted the European Central Bank and EU insurance regulator to call on Brussels to take a more active role by setting up an EU-level reinsurance scheme and a public natural disaster fund.

[...]