Should we ensure insurance?

[beausox]

The disaster in NO and Florida is heart wrenching. It is sad . We should do all we can- this time- but we should make it plain that personal risk is involved and the risk taker bears the responsibility in the future. There is a good reason why private insurers are refusing to write insurance in certain areas. FEMA does great work but the government should stop bailing out people in risky areas that are absolved from risk.

A friend owns a home in Grand Cayman . When the hurricane hit a year or so ago it destroyed his home. He did not have insurance because the premium was nearly 1/3 the value of the home( in the Caymans most of the value is in the land). He is rebuilding, things do not proceed quickly in Grand Cayman- manana- with the hope tha it will be 4 years before the next one. Granted the world need not worry about foreign owners of luxury homes but it does illustrate the point about taking responsibility.

[Live&DieBillsFootball]

I agree. It is a joke that the taxpayers have to subsidize insurance for people who live in damage prone areas. If someone can afford to build a house on a barrier island, they should have to pay for the insurance costs themselves.

 

If you let the marketplace set the cost to insure a house in a damage prone area, maybe fewer people would decide to build there.

[Ghost of BiB]

I agree.  It is a joke that the taxpayers have to subsidize insurance for people who live in damage prone areas.  If someone can afford to build a house on a barrier island, they should have to pay for the insurance costs themselves. 

 

If you let the marketplace set the cost to insure a house in a damage prone area, maybe fewer people would decide to build there.

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That said, might have to re-define a couple of 100 year flood plains, eh?

[UConn James]

I guess not many people paid attention to that Sunday School class discussing Jesus' parable of the man who builds on sand and the man who builds on rock. Either that, or they solely took it to as a religious euphamism. I think it was also meant as practical advice; Jesus after all, was a carpenter.

 

It takes 42 muscles to frown and say "Sorry about your home." But it takes only 4 muscles to slap someone across the head and say, "You built your house WHERE!?!?"

[beausox]

That said, might have to re-define a couple of 100 year flood plains, eh?

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And who will insure a 100 year plan that has disasters every score of years?We do not whine and moan over our bitter winters. It is a given in this neck of the woods. Should the government insure us that winter will be mild in Buffalo?Add up our expenses 4x4, snow blower, high heat bills, ice storms. No one else but the chief beneficiary should pay. You want to live on the San Andreas fault line or hillsides of San Fernando Valley then you take a real risk for which I should not pay.

[finknottle]

The disaster in NO and Florida is heart wrenching. It is sad . We should do all we can- this time- but we should make it plain that personal risk is involved and the risk taker bears the responsibility in the future. There is a good reason why private insurers are refusing to write insurance in certain areas. FEMA does great work but the government should stop bailing out people in risky areas that are absolved from risk.

A friend owns a home in Grand Cayman . When the hurricane hit a year or so ago it destroyed his home. He did not have insurance because the premium was nearly 1/3 the value of the home( in the Caymans most of the value is in the land). He is rebuilding, things do not proceed quickly in Grand Cayman- manana- with the hope tha it will be 4 years before the next one. Granted the world need not worry about foreign owners of luxury homes but it does illustrate the point about taking responsibility.

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Lesson: Don't build in Grand Cayman!!!!!

 

If we start guarenteeing stupid insurance policy, then we all wind up paying. If insurers themselve receive an insurance guarantee, it will encourage them to be more aggressive in insuring at-risk properties at below-market prices. This will have the effect of (economically) encouraging people to build in stupid places.

 

It's analogous to to the over-lending that occurs in countries whose central banks are too liberal with guarantees to lenders... you eventually wind up with a banking crisis and a massive bailout.

[Ghost of BiB]

And who will insure a 100 year plan that has disasters every score of years?We do not whine and moan over our bitter winters. It is a given in this neck of the woods. Should the government insure us that winter will be mild in Buffalo?Add up our expenses 4x4, snow blower, high heat bills, ice storms. No one else but the chief beneficiary should pay. You want to live on the San Andreas fault line or hillsides of San Fernando Valley then you take a real risk for which I should not pay.

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Do you have any idea what a hundred year flood plain is or means?

[Kevbeau]

Do you have any idea what a hundred year flood plain is or means?

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It means my land will only flood once every 100 years...right?

 

 

The way I understand it you have an approximate 1% chance of your land flooding every year...and depending on how far back an area's records go, determining a 100 year, 150 year, 200 year, etc. flood plain is just a shot in the dark. Remember..our country isn't that old old, so designations for flood plains are not statistically significant.

 

As a result, a home that is considered to be in a 100 year plain can easily find itself designated a 25 year flood plain (or some other level) after a few good storms.

 

Conclusion: Basing development on flood plain designations = bad idea.

 

How'd I do?

[Ghost of BiB]

It means my land will only flood once every 100 years...right? 

The way I understand it you have an approximate 1% chance of your land flooding every year...and depending on how far back an area's records go, determining a 100 year, 150 year, 200 year, etc. flood plain is just a shot in the dark. Remember..our country isn't that old old, so designations for flood plains are not statistically significant.

 

As a result, a home that is considered to be in a 100 year plain can easily find itself designated a 25 year flood plain (or some other level) after a few good storms.

 

Conclusion: Basing development on flood plain designations = bad idea.

 

How'd I do?

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Pretty good. The only reason I brought it up was because it factors into insurance premiums and zoning controls, and also as you say that events like this render them moot. You aren't supposed to build landfills on one, for example.

[Live&DieBillsFootball]

Pretty good. The only reason I brought it up was because it factors into insurance premiums and zoning controls, and also as you say that events like this render them moot. You aren't supposed to build landfills on one, for example.

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Well, it's supposed to factor into insurance premiums. I lived in Sarasota FL for 5 years and while insurance rates were climbing in the area due to recent storms, people on Siesta Key, Longboat Key and other barrier islands were not seeing the same increases although they were much more susceptible to damage from storms. There is some program in place which allows insurance to be available to them at affordable rates.

 

Of course these are the most expensive areas that also are the most vulnerable in a storm, but their insurance is subsidized. It's an extra kick in the ass, that there is no public beach access on Longboat Key even though taxpayers subsidize the property insurance and also pay for beach renourishment.

 

I'm sure that it is similar on the East Coast of FL also.