Under water? Banks play home loan lottery as insurers bail out By Swati Pandey, Carolyn Cohn and Simon Jessop•Under water? Banks play home loan lottery as insurers bail out FILE PHOTO: Flooded areas can be seen from an Australian Army helicopter after Cyclone Debbie passed through the area near the town of Bowen, located south of the northern Queensland town of Townsville in Australia By Swati Pandey, Carolyn Cohn and Simon Jessop SYDNEY/LONDON (Reuters) – Only a year after losing their homes to floods in parts of Australia’s north eastern coast of Queensland, people are moving into new houses built on or near the same plots.But while banks have been only too willing to offer them long-term loans at rates in line with the national average, insurance companies, who suffered insured losses of A$1.24 billion ($820 million) as a result of the Townsville floods, are more cautious.A tradesman who has bought a new home in Townsville after walking away from his water-damaged dwelling 15 kilometres (9.32 miles) away, said the insurance premium had risen 350%, a price he was not willing to pay to protect against another flood.”Locals call this place ‘Brownsville’, that’s how dry this place was. So it is unfair for insurers to react in such an extreme manner after just one event. This was a once-in-a-500-year flood, it won’t come again in my lifetime,” the tradesman, who would only be identified by his surname Cullen, said.Banks appear to be taking a similar view, with long-term funding still widely available for new and existing housing, while insurers are more picky.Allianz, for example, has become more selective about writing new policies in Townsville, brokers said, while others including Suncorp and QBE stopped covering large apartment units after the Queensland floods.The insurers agree that the floods were previously a 1-in-500-year event, but say climate change has made such events more frequent.That divergence is echoed across regions in developed countries which have been hit by floods, forest fires or other extreme weather-related events linked to climate change and is worrying regulators and industry executives.They fear banks are building up portfolios of long-term loans against construction projects, infrastructure and real estate that are becoming uninsurable.Extreme weather could depress property prices and leave banks exposed to defaults on home loans or large commercial projects. Without insurance, owners may be unable to afford the cost of maintaining their properties.
Start of spring to usher in severe weather threat for central U.S.
An uptick in stormy weather across the country will put the Plains to the Ohio Valley on alert for severe weather later this week.
An intense storm wrecked havoc earlier in the week, dumping feet of snow in the Sierra Nevada Mountains in the West and sweeping rain across the remainder of the Southwest into Wednesday.
Meanwhile, several rounds of wet weather will target the center of the country. Wet weather will spread from Texas and Oklahoma to the middle Mississippi River Valley Monday, and again Tuesday into Wednesday.
While there could be flash flooding with any of these rounds of rain and thunderstorms, any severe weather will remain isolated.
However, once the more robust western storm clears the Rockies on Wednesday night, the center of the country will need to be more prepared for severe weather.
Cold air will collide with moisture on the northern side of the storm, spreading snow from Colorado to Wisconsin. On the southern side of the storm, moisture will clash with warm and humid air, bringing the threat for severe weather.
„Thunderstorms on Thursday in the southern Plains will be capable of producing frequent lightning, damaging wind gusts and tornadoes,” said AccuWeather Meteorologist Brett Edwards.
Cities like Dallas, Oklahoma City, Little Rock and Wichita, Kansas could all be in the line of fire through Thursday night.
Farther north, different atmospheric dynamics will be in play, making for a slightly different severe theat.
The Midwest and into the Ohio may have severe weather, including an isolated tornado, but the threat may be less widespread than that across the South.
In both locations, heavy downpours could cause flash flooding, and reduce visibility for motorists. Travelers along portions of many major interstates, including interstates 20, 30, 40, 55 and 70 may need to pay attention to the changing weather conditions into Thursday night.
Most locations in the center of the country look to dry out by Friday, as high pressure moves cooler, drier air down from Canada. The one place where this may not be the case is across southern Texas.
„The same front that looks to produce the most robust severe weather of the week on Thursday may linger in the southern half of Texas on Friday,” said Edwards.
Texas cities like Houston, San Antonio and Brownsville may get a couple chances throughout the day at some rain and thunderstorms, which much of the region could use.
According to the U.S. Drought Monitor‘s latest update on March 10, much of southern Texas is in a drought, with some locations in a severe or extreme drought.
|The above map shows the U.S. Drought Monitor‘s drought data across the country as of March 10. The darkest orange and red on the map indicates severe drought and extreme drought conditions, respectively.|
Although winter is normally the driest time of year for the region, this past December through February was even drier than normal. Both Houston and San Antonio only recorded 63% of their normal rainfall, while McAllen only had 33%.
Locations right along the coast faired better during the winter with near-normal rainfall.
While the rain could help alleviate the dry conditions, a heavier downpour could also lead to flash flooding. Wet weather looks to linger in the southern half of Texas even into the weekend, even if the majority of the Plains looks to be rather quiet.
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