Category Archives: Environment

Rising Danger of Deer-Vehicle Collisions

If you’re planning on taking a drive to enjoy the beautiful fall foliage, bear in mind that‚  this is peak season for deer-vehicle collisions.

A just-released report from State Farm‚  reveals that while the number of miles driven by U.S. motorists over the past five years has increased just 2 percent, the number of deer-vehicle collisions in this country during that time has grown by ten times that amount.

State Farm estimates some 2.3 million collisions between deer and vehicles occurred in the U.S. during the two-year period between July 1, 2008 and June 30, 2010‚ an increase of 21 percent in five years.

The average property damage cost of these incidents was $3,103, up 1.7 percent from a year ago. Furthermore,  about 200 fatalities each year are caused by deer-vehicle collisions, according to the Insurance Institute for Highway Safety (IIHS).

These collisions are more frequent during the deer migration and mating season which runs from October through December. The combination of growing deer populations and the displacement of deer habitat caused by urban sprawl are producing increasingly hazardous conditions for motorists and deer.

So in  which states are drivers and deer most at risk?

For the fourth year in a row, West Virginia tops the list of those states where a driver is most likely to collide with a deer. State Farm calculates the chances of a West Virginia driver striking a deer over the next 12 months at 1 in 42.

Iowa (1 in 67) is second on the list, followed by Michigan (1 in 70), South Dakota (1 in 76) and Montana (1 in 82). The state in which deer-vehicle collisions are least likely is still Hawaii (1 in 13,011).

Note: State Farm now calculates the likelihood of deer-vehicle collisions using the number of licensed drivers instead of number of registered vehicles against its claims data.

Check out this map to see if you live in a high risk state:


Our  Terms+Conditions vlog has more on the dangers of deer-vehicle collisions. Also check out I.I.I. tips on how to avoid deer/car collisions.

Oil in Flood Water

The Federal Emergency Management Agency (FEMA) has confirmed that National Flood Insurance Program (NFIP) policies will cover property damage caused by oil in flood waters in the event of a defined flood.

The clarification comes after rising concerns over whether flood insurance policies would cover damage to homes and businesses if oil from the Deepwater Horizon spill mixes with flood waters, comes ashore during a storm and causes pollution damage to buildings.

In a memorandum to Write-Your-Own (WYO) flood program insurer participants, James Sadler, director of claims at the NFIP, said:

“Oil in flood water is not new for the NFIP, especially in riverine flooding. In the past, the mixing of oil and other pollutants in flood waters resulted from damage caused by a storm.†

FEMA states that there must first be a defined flood as described in the Standard Flood Insurance Policy (SFIP) and that damage caused by the oil in flood waters is covered subject to the provisions of the SFIP. There must also be direct physical loss to property for flood coverage to apply.

Other key points made by FEMA are:

  1. Under the terms of the General Property Form of the SFIP (commercial buildings and contents coverages must be purchased separately), damage caused by pollutants is limited to $10,000.
  2. Damage to residential buildings and contents from pollutants is covered up to the policy limits, under the Dwelling form and the Residential Condominium Building Association Policy form.
  3. Damage to ground, soil or land caused by flood, oil, or flood water mixed with oil is not covered.
  4. The cost of complying with any local or State ordinance including one that requires special removal methods for oil is specifically excluded.
  5. There is no coverage for testing or monitoring of pollutants unless there is a law or ordinance requiring it.
  6. FEMA or the WYO companies retain the right to subrogate, i.e. if the policyholder makes a claim against an entity who caused a loss and recovers any money, the policyholder must pay FEMA or the WYO back before they may keep any of the money.

Check out I.I.I. facts and stats on flood insurance.

Energy Security Supply Threat

As the New York Times reports on the lack of consensus surrounding how much oil is spilling from the Deepwater Horizon well in the Gulf of Mexico, a timely new study from across the pond says that green energy systems are essential in securing our energy supply and protecting the environment.

According to the report from Lloyd’s 360 Risk Insight and UK think tank Chatham House, the Deepwater Horizon oil spill is an example of how reliance on fossil fuels is pushing the search for reserves into more difficult and risky territories as declining production from easy to access oil reserves combines with growing global energy demand.

However, Lloyd’s reports that these trends could spur the transition to more cost-efficient clean and renewable energy systems. A press release quotes Lloyd’s CEO Richard Ward saying:

The current generation of business leaders need to rethink their approach to energy risks or be left behind as energy becomes less reliable and more expensive. The environmental and economic cost of our reliance on fossil fuels is too high. We need a long-term plan to reduce consumption and diversify our energy sources.†

As a result Lloyd’s says that all businesses, not just the energy sector, need to consider how they, their suppliers and their customers will be affected by energy supplies which are less reliable and more expensive.

With markets for low-carbon energy products likely to be worth at least $500 billion per year by 2050, Lloyd’s says this sector holds tremendous opportunities for business, though the lack of global agreement on carbon reduction is inhibiting commitment and investments.

The report calls on governments to set clear policies and create certainty in the transition to a low carbon economy. It also urges businesses to prepare for a new set of risks as our energy system changes. Check out I.I.I. energy facts and stats.

Oil Spill and Regulatory Fallout

As Congressional hearings continue about the impacts of the recent Gulf oil spill, the National Law Journal via reports that environmental law firm Earthjustice and New Orleans law firm Waltzer & Wiygul have filed a lawsuit in federal court on behalf of conservationists and fishermen against the U.S. Department of Interior’s Minerals Management Service (MMS).

According to the NLJ article, the suit – Gulf Restoration Network and Sierra Club v. Salazar – charges that the agency violated federal law by exempting oil companies that drill in the Gulf of Mexico from disclosing blowout and worst-case spill scenarios as well as plans for dealing with them before approving the companies’ offshore drilling plans.

For the BP Deepwater Horizon rig exploration plan, MMS had issued a notice to oil companies telling them that they didn’t have to comply with those blowout and worst case oil spill rules, according to Earthjustice. In addition, it alleges that MMS failed to produce an analysis of potential environmental impacts in the event of a blow-out despite being required by law.

The legal challenge asks the court to invalidate the MMS practice of sending notices to oil companies informing them that they don’t have to comply with the rules and to order review of existing offshore drilling plans that do not comply with existing rules.

A quote from Earthjustice attorney David Guest sums up the case thus:

This case is about lax regulation by the Minerals Management Service. It is actually easier to get a permit for an offshore oil well than for a hot dog stand.†

U.S. President Barack Obama recently criticized what he described as a “cozy relationship† between the oil and gas industry and the MMS and charged U.S. Interior Secretary Ken Salazar with reforming the agency. Salazar already has announced that MMS will be split into two, effectively separating its safety and environmental enforcement responsibilities from its leasing, permitting and revenue collection activities.

Check out an I.I.I. backgrounder on offshore energy facilities and insurance considerations.

Oil Spill: Developing Story

The Wall Street Journal reports that lawyers are descending on the Gulf coast and preparing lawsuits over the oil spill from the sunken Deepwater Horizon rig. It notes that the regime for compensating those hurt by offshore oil spills is complex:

Individuals can file traditional lawsuits in court and receive money by proving liability. Or injured parties can make use of a claims process established under the 1990 Oil Pollution Act, in which the federal government makes payments from a fund collected through a tax imposed on the oil industry.†

Meanwhile the New York Times  reports  that while President Obama has called the spill “a potentially unprecedented environmental disaster† and doomsday predictions abound about its impact, the spill is not unprecedented nor yet among the worst oil accidents in history.

Its ultimate impact, according to the NYT, will depend on a long list of interlinked variables, including the weather, ocean currents, the properties of the oil involved and the success or failure of the frantic efforts to stanch the flow and remediate its effects.

Both articles reflect an important point. From the liability and environmental standpoint, it’s simply too soon to  tell how this spill will develop and what its final impact will be. As insurers know, these kinds of events take many years to unfold.

Check out I.I.I. information on major oil spills in history. For the latest on the response to the disaster, check out a collaborative multimedia Web site being maintained by BP, Transocean and various government agencies including the U.S. Coast Guard and NOAA.

Gulf Oil Spill Worsens

Speculation is mounting that the growing oil spill in the Gulf of Mexico following the explosion, fire and sinking of the Deepwater Horizon oil rig off the coast of Louisiana may prompt the declaration of a federal disaster. The Jackson Clarion Ledger reports that just as Mississippi Governor Haley Barbour submits a disaster declaration request to President Obama for last Saturday’s deadly tornado, another major disaster looms for Mississippi.

Latest reports suggest oil is leaking at the rate of 5,000 barrels a day from the damaged rig, not 1,000 as had been initially estimated and officials believe the spill could reach the coast of southeastern Louisiana as soon as Friday night. The Clarion Ledger reports:

The impact of the spill is a direct threat to the state’s shrimp and oyster fishermen and to some of the state’s most pristine and important wetlands. Those areas have only recently begun to recover from 2005’s Hurricane Katrina.†

Meanwhile, a post at the Mississippi Press blog cites experts saying that although federal disaster declarations usually follow hurricanes and other natural catastrophes, the manmade oil spill in the Gulf could conceivably qualify as well. It quotes a spokesman for Gov. Barbour saying that while officials are still focused on keeping the oil spill offshore, a disaster declaration “would be one of the options open to us.†

According to FEMA data, there have been 35 major disaster declarations in 2010 so far – all of which were for various weather-related events. A major disaster declaration must be requested in writing to the President by the governor of a particular state. In this request the Governor certifies that the combined local, county and state resources are insufficient and that the situation is beyond their recovery capabilities.

The Mississippi Press blog notes that in 2001 then-President George W. Bush issued major disaster declarations for Virginia and New York following the September 11 terrorist attack. Two years later, he also issued a less-weighty emergency declaration for Texas and Louisiana following the loss of the space shuttle. Check out I.I.I. information on offshore energy facilities and insurance considerations.

Environmental Impact of BPA under Scrutiny

The Environmental Protection Agency (EPA) yesterday announced that it will be studying the impact of bisphenol-A on the environment and adding it to its list of chemicals of concern. BPA is a chemical used in a variety of consumer and industrial products. Some food and drink packaging, such as water and infant bottles, contains BPA. In January the U.S. Food and Drug Administration’s (FDA) said it had some concerns about the potential human health impacts of BPA and it would study the potential effects and ways to reduce exposure to BPA in food packaging. Now the EPA says releases of BPA to the environment exceed one million pounds per year. Its study of the environmental impacts of BPA includes:

  • †¢ Adding BPA to the chemical concern list on the basis of potential environmental effects
  • †¢ Requiring information on concentrations of BPA in surface water, ground water, and drinking water to determine if BPA may be present at levels of potential concern.
  • †¢ Requiring manufacturers to provide test data to assist the agency in evaluating its possible impacts, including long-term effects on growth, reproduction and development in aquatic organisms and wildlife.
  • †¢ Using EPA’s Design for the Environment (DfE) program to look for ways to reduce unnecessary exposures, including assessing substitutes, while additional studies continue.
  • †¢ And, continuing to evaluate the potential disproportionate impact on children and other sub-populations through exposure from non-food packaging uses.

A New York Times article says the EPA action indicates the government is looking to reduce the use of BPA in food packaging, plastic bottles and other sources of exposure. The NYT page includes a list of resources from around the Web about BPA. Washington recently became the fifth state to limit the use of BPA in plastic products intended for children and sports bottles, joining Connecticut, Maryland, Minnesota and Wisconsin. Bills to ban BPA are also pending in a number of other states. Federal legislation to ban BPA in all food and beverage containers was introduced last year.

Deer-Vehicle Collision Frequency Jumps

The number of vehicles on U.S. roadways has grown by 7 percent over the last five years, but the number of times those vehicles have collided with deer has jumped by 18.3 percent. In its latest study of annual deer claims, State Farm estimates 2.4 million collisions between deer and vehicles occurred in the U.S. during the two-year period between July 1, 2007 and June 30, 2009. Among the 35 states where at least 7,000 deer-vehicle collisions occur per year, New Jersey and Nebraska posted the largest increases of 54 percent. Deer-vehicle collisions also jumped by 41 percent in Kansas, by 38 percent in Florida, Mississippi and Arkansas, by 34 percent in Oklahoma and by 33 percent in West Virginia, North Carolina and Texas. For the third year in a row, West Virginia tops the list of those states where a collision with a deer is most likely. State Farm puts the chance of a West Virginia vehicle colliding with a deer in the next 12 months at 1 in 39. Michigan (1 in 78) remains second on that list followed by Pennsylvania (1 in 94), Iowa (1 in 104) and Montana (1 in 104). The state in which deer-vehicle collisions are least likely is still Hawaii (1 in 9,931). The average property damage cost of these incidents was $3,050, up 3.4 percent from a year ago. Check out I.I.I. tips on avoiding deer-vehicle collisions.

Thunderstorm Losses

A severe thunderstorm that swept across New York City on Tuesday night left nearly 100 trees felled and hundreds more damaged in the city’s Central Park. An August 19 article in the New York Times cites officials at the city’s Department of Parks and Recreation and at the Central Park Conservancy saying this is the most severe destruction the park’s trees have sustained in decades. Trees in several other city parks also suffered significant damage. The storm is a reminder that thunderstorm losses can be substantial. A recent MunichRe Webinar noted that severe thunderstorms in the United States caused estimated insured losses of $6.1 billion (estimated overall losses of $8.9 billion) in the first six months of 2009. This was more than first-half losses from  flood, winter storms and wildfires combined.

EPA Declares Asbestos Cleanup Emergency

The Environmental Protection Agency (EPA) yesterday said it has determined that a public health emergency exists at the Libby asbestos site in northwest Montana. This is the first time the EPA has made a public health emergency declaration under the Superfund law (CERCLA). “This determination recognizes the serious impact to the public health from the contamination at Libby and underscores the need for further action and health care for area residents who have been or may be exposed to asbestos,† said the EPA in a press release. It noted that investigations performed by the Agency for Toxic Substance and Disease Registry have found the incidence of occurrence of asbestosis in the Libby area staggeringly higher than the national average for the period from 1979-1998. In 1963, W.R. Grace, a construction materials and chemicals company bought Zonolite, a Libby, MT company that mined vermiculite, a mineral contaminated with asbestos. Last month a Montana federal jury acquitted W.R. Grace and three former executives of criminal charges related to the contamination. The Libby asbestos site has been on the EPA’s Superfund national priorities list since 2002, and cleanup has taken place since 2000. The mine closed in 1990. Check out I.I.I. information on asbestos liability.