The Limits of Indemnity: Compensating Loss after Climate Disaster

• In Event: 40463 - Climate Change, Risk, and Markets

Abstract

How do climate disasters change social understandings of fair compensation for loss? Bridging work in economic sociology, environmental sociology, and classical theory, this paper elucidates disaster-driven changes in the moral economy of compensation. I focus on the principle of indemnity—the cardinal doctrine underlying property insurance—which dictates that insurance companies should offer individualized compensation for the loss of a home. Using textual, interview, and ethnographic data, I examine how indemnity was historically defined as a moral order in property insurance, and how it becomes contested in the context of total destruction that follows recent Northern California wildfires. I show how an extant tool for compensating loss—the individualized household inventory—is contested by homeowners, whose uncompensable existential losses become imbricated with their compensable material losses. I argue that the total loss that accompanies climate disasters changes moral understandings of what a sufficient, appropriate process of compensation looks like, from an individualized to a standardized process. I discuss how this shift impacts disaster recovery in an era of accelerating climate change.

Author

• Joyce Ho, University of Michigan-Ann Arbor