Best hurricane insurance? High ground

Robert Reich


KAI RYSSDAL: Hurricane Ike is bearing down on the Texas Coast. Forecasters are saying it looks like landfall will be Saturday. Across on the other side of the Gulf of Mexico, the Florida Keys reopened today. Residents have been allowed back in. Visitors will be welcome once again tomorrow. The Keys had some minor flooding but were mostly spared. Commentator Robert Reich says now would be a good time to look at how we insure homeowners in disaster-prone places.

ROBERT REICH: Even if you don't believe in global warming, a lot of insurance companies do. Ever since eight costly hurricanes struck Florida and the Gulf Coast in 2004 and 2005, large national insurers have been dropping customers whose homes are located on or near coastlines and refusing to offer new policies in these areas.

It's not only flooding that has insurers worried. It's also wind damage, mud slides, and coastal erosion. We're talking billions of dollars of potential damage. Right now there's only a patchwork of state insurance funds that may not be up to the task, coupled with federal flood insurance that already went $17 billion into the hole after Katrina.

And if you do believe in global warming -- and just about every expert does -- hurricanes are gonna get even more violent and the oceans will rise even faster over the next decade or two, even if we figure out some way to control climate change over the longer term.

To make matters worse, developers are planning even more homes and commercial properties in vulnerable areas. Seventy-seven million baby boomers will be retiring over the next 15 to 20 years, and many want to go to coastal areas where the weather is milder and the beaches beautiful -- Florida, the Carolinas, coastal Virginia, Cape Cod.

So who's gonna insure against all the likely damage? There's mounting pressure on Washington to come to the rescue with federally-subsidized insurance. Which means that, once again, the rest of us taxpayers will be left holding the bag when disaster strikes.

Here's a better idea. Get private insurers back into the business of insuring homeowners against flooding, wind damage and erosion. Do this by having the federal government offer these companies reinsurance against catastrophic loss -- essentially, backing them up in much the same way it does for possible losses associated with terrorism.

But there's no reason to extend this back-up to future development in vulnerable coastal areas. We now know too much about global warming to encourage this. Sorry boomers, you'll have to retire to safer ground.

RYSSDAL: Robert Reich teaches public policy at the University of California, Berkeley. His most recent book is called "Supercapitalism."

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Despite the socialized nature of natural hazard insurance, it is time to have people who build houses in such disaster prone areas take on more risk. My car insurance premium reflects my living in a city populated by young drivers that have more accidents. Why shouldn't homeowners insurance.

“Just about every expert does (believe in global warming).”

That’s a bold statement considering how much debate still exists within the scientific community. Perhaps the small sample of “experts” he polled was limited to fellow economists or his neighbors living atop that tree in Berkeley. Which, by the way…is that the higher ground he’s suggesting Boomers seek to flee our imminent rising oceans?

My college years in Boulder have me on-board with recycling and energy conservation. But this effort to combat global warming…talk about one BIG waste of time and money.

Robert Reich needs to stop acting like a scientist and should only talk about economics.

Kerry Emanuel, the main scientist in the press over stronger storms with warming recently changed his tune after further research. The Houston Chronicle reported "The hurricane expert, Kerry Emanuel of the Massachusetts Institute of Technology, unveiled a novel technique for predicting future hurricane activity this week. The new work suggests that, even in a dramatically warming world, hurricane frequency and intensity may not substantially rise during the next two centuries."

Atlantic hurricanes seem to be more tied to a circulation call the Atlantic Decadal Oscillation that flipped warm in 1995, and to a lesser degree the Pacific Multidecal Oscillation which flipped negative last year. That brings fewer El Ninos, and El Ninos suppress hurricane formation. So, expect several more bad hurricane years before things quiet down for a couple decades.

Oh - the PDO also brings decades of cooling. There are signs of that happening and also signs that ocean levels are dropping. Fascinating times!
-Eric Werme

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