Insurers shrink from coasts (not just in the Gulf, it's happening on the East coast too)

As insurance companies retreat from their coverage of coastal areas along the Eastern Seaboard, legislators in Annapolis and other state capitals are stepping in to protect homeowners faced with fewer and fewer options.

Maryland legislators have grilled insurance executives at hearings and introduced bills that would force companies to cover all areas of the state. Lawmakers also are looking at granting the state's top regulator more authority over the industry, and offering tax breaks to encourage residents to safeguard their homes against storm damage.

The confrontation comes as Allstate Corp., State Farm Insurance Cos. and Nationwide Mutual Insurance Co. - three of the largest insurers in Maryland - have moved to limit their liability along the Atlantic Coast and in some cases near the Chesapeake Bay, areas feared to be at heightened risk from hurricanes. Similar changes have been made in other coastal areas; State Farm recently decided to stop selling new policies on homes and small businesses in all of Mississippi.

"We have to send the message you just can't pick and choose based on some prediction of what may happen in the future," said Sen. Norman R. Stone Jr., a Baltimore County Democrat. "If things were 100 percent guaranteed, you wouldn't need insurance."

Companies are not only refusing new policies in coastal areas; they are raising rates, imposing higher deductibles and dropping coverage for certain claims, such as mold damage. They are doing so even though many states, including Maryland, have taken on higher-risk homeowners through government-run insurers of last resort.

.......

"Coastal exposure is potentially bankrupting exposure," said Joseph J. Annotti, spokesman for Property Casualty Insurers Association of America, which represents some of the nation's largest homeowner insurers.



http://www.baltimoresun.com/news/local/bal-te.md.coastal18feb18,0,240422.story?coll=bal-local-headlines

there has been explosive growth up and down the coast here in florida. huge high-rises that should not have been built in high risk areas. we were having record hurricanes, and at the same time they're building more and more of these high-rises. insanity.

make huge profits while the people that they DO insure are told that their policies are worthless because the insurance companies insist that the coverage does not cover any kind of damage from storms.

My coverage which was $23.00 per month in 1990 with a $500 deductible on any damage is now $160.00 per month with a deductible of 2% of the value of the entire insurance policy. I haven't changed companies.

And none of us who are paying for these insurance policies know if they will pay off in the case of severe damage.

my insurance story sucks, too...we got DUMPED by our insurance company and had to go with citizens. we were paying $800 a year, now we're paying close to $3,000.

the last 15 years. No profit there.

Also remember that in many cases the companies are unique to the state to accomodate regulation. XX Insurance bought in FL is bought from the XX Insurance Company of FL which is a different company than the XX Insurance company of Wyoming. While done to accomodate local regulators, it also means its greatly limits the ability to move funds from one state to another.

"We have to send the message you just can't pick and choose based on some prediction of what may happen in the future," said Sen. Norman R. Stone Jr., a Baltimore County Democrat"

Probability tables are the very basis of insurance risk. This politician isn't being honest with his constituents by making this statement to the media.

The insurance companies must be encouraged to stay in given areas, but adjust their rates in those areas only to reflect the real risk. Don't allow insurance companions to spread the risk by adjusting the rates of the whole state to assist those on the coast or at high risk.

Developers: "Gee, we can't build and sell beachfront homes if potential buyers won't be able to get insurance (lenders won't allow it). Help us out, Maryland General Assembly, make the Insurance Companies provide coverage for these high risk areas, so we can continue developing them"

And guess who is ultimately picks-up the tab. You and me.

Pols don't want to even try to understand risk and probabilities. It makes their heads hurt.

other businesses have to take economic hits and they don't; either raising rates like there's no tomorrow or abandoning the area in favor of more lucrative ones?

There's a word for it. And it ain't "business".

However, if consumers are the ones in control, let's convince them all to drop their insurance at the drop of a pin. Then the insurance companies will go bankrupt and we can all party. :crazy: (Note: It won't happen.)

By requiring insurance companies to make policies available to anyone, exclusive of risk exposure - then policy premiums increase for everyone. Maryland will forcing ALL its citizens to subsidize the few who insist on developing vulnerable beachfront/waterfront property in an era of global warming and rising water levels.

Why are Maryland Dems demanding the people subsidize the rich? :crazy:

Will that cause the population to shift away from Florida and other spots that have been enjoying population increases?

The only thing restraining the current willy-nilly frenzy of beachfront/waterfront building is the insurance issue. Insurors are seeking to pull-out from areas in which the risk is becoming excessive due to ramifications of global warming. The result is that, without an insurance policy in hand, mortgage lenders won't provide loans to new home buyers (lenders need to know they'll get their money back in the event a home is destroyed - insurance is mandatory requirement).

If Maryland mandates insurance companies make coverage available everywhere, including vulnerable beachfront/waterfront properties - then the homebuyers get their req'd policies, the mortgage lenders are willing to make the loans, the developers keep developing - and you and I get stuck with the tab in the form of higher premiums and increasing loss of waterfront habitat.

That's why Va. Beach, Nag's Head, coastal SC, have all become more densely populated.

And it's happening all over, too. Ironically, people are relocating to the coasts in droves, precisely at the moment in history when the dangers of living there are increasing exponentially.

Check out the Hartford Courant for the intricate details relating to the sale of Katharine Hepburn's house. The property was going to change hands for the first time in nearly 100 years and the new owners were/are going to be subject to the post-'38 laws.

http://www.sunherald.com/mld/sunherald/16728676.htm

PUNISHING MISSISSIPPI: SUN HERALD EDITORIAL
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