When Hurricane Katrina hit the Gulf Coast, many of us asked if it was caused by global warming.

Now Sandy has hit, causing incredible death and destruction in the Northeast. We again ask if the storm was caused by climate change.

We don't know for sure what role climate change played in Sandy, but we do know that the coastal ocean water is 9 degrees warmer than average for this time of year and that warmer water tends to make hurricanes more powerful. We also know that the water level is a foot higher than it was 100 years ago, making surges stronger.

This monster storm came after a summer of widespread crop failures. More than half of the country was in a state of drought this year, evoking comparisons with the Dust Bowl of the 1930s.

In addition to our own well-being, we have to be concerned about the health of the insurance industry. With the cost of storm damage escalating, will they continue to bail us out when the next disaster strikes?

Big trouble is brewing in the industry, according to a recent study by Ceres, a Boston-based nonprofit that promotes sustainable business practices. The study, "Stormy future for U.S. property/casualty insurers: The growing costs and risks of extreme weather events," finds that the value of insured losses due primarily from Hurricane Katrina in 2005 was approximately $60 billion. In 2011, the number was $44 billion due to tornadoes in Missouri, wildfires in Texas, hailstorms in Arizona, and flooding along the Mississippi River. Right now, you can almost hear the calculators clicking as property owners survey the damage from Sandy.

This situation is unsustainable for insurance companies. Ceres reports that by the end of 2011, "the underwriting loss was $34 billion, and the industry had suffered the most credit downgrades in a single year since 2005."

As a result, insurance premiums are likely to go much higher, and companies may refuse to insure homes and businesses in areas of the country hard hit by extreme weather events. We saw Allstate pull back from much of the East Coast after Katrina, and we can expect more retraction now.

This affects us all. Insurance companies will try to recover their losses with higher premiums elsewhere. When insurance companies fail to pay for damage, the burden falls on the party of last resort — the federal government. That means you and me, the taxpayer. In the case of crop failure, it means higher food prices as well. Plus, when insurance companies employing thousands of people go belly up, unemployed people will drag down the economy.

Perhaps 20 years ago we could shrug off hurricanes and drought as "a bad year," but no longer. We have to plan for scenarios with consistently high levels of severe weather damage.

Some insurance companies have begun to take an active role in addressing climate change. Under an alliance called Climatewise, roughly 38 organizations, including leading insurers and reinsurers, are adopting different models and updating pricing and underwriting of risks. In addition, they are supporting climate awareness among customers, reducing their own footprints and incorporating climate change into investment strategies.

As Ceres researchers point out, "We have seen excellent examples of insurer sector leadership in addressing climate risks, but industry-wide engagement and action .<TH>.<TH>. is nowhere near its potential."

Let 2012 be a wake-up call that we all need to work together to speed the transition to a low carbon economy.

<i>Jane Bender, former City Council member and mayor of Santa Rosa, is vice president of the Climate Protection Campaign in Sonoma County.