'We all need to pray to the hurricane gods."

Radley Balko | February 21, 2007

Residents of hurricane-battered Florida are facing soaring insurance premiums. Some, in fact, can't afford any insurance at all. Smart people might interpret this as the market's way of saying, "Hey, dumbass. It isn't safe to live here. Better to look elsewhere."

But not Florida lawmakers. They've just signed on to a bill that would artificially lower insurance premiums by backing coverage with guarantees from state coffers. Unfortunately, it's money the state doesn't have. The bill guarantees $32 billion in relief from the state's "catastrophe fund" should (read: when) a major hurricane again hits Florida. Currently, the fund contains . . . less than $1 billion.

Since neither the state's catastrophe fund nor the state-chartered insurance company has anywhere near enough money on hand to pay the claims they may now be required to pay after a major hurricane, the measure is considered a gamble, even by proponents.

"We all need to pray to the hurricane gods," said state Sen. Steven Geller, who represents this beachfront condo city and negotiated a portion of the bill. "Yes, we're taking a risk. But what were our options?"

Critics have decried the measure as irresponsible. Under the legislation, in the event of a major hurricane, the state will pay claims by taxing home, automobile and some other types of insurance policies sold in the state. That makes it especially unfair, critics argue, to inland and upstate Floridians, who could be asked to help pay to help bailout riskier coastal areas in South Florida.

"If I wanted to gamble -- personally, I don't even buy lottery tickets -- and I'm pulling money out of my own pocket, that's one thing. But taking money out of someone else's pocket with the force of law is just irresponsible," said state Rep. Don Brown, the chairman of the insurance committee, who cast one of only two votes in the Florida House against the measure. "It's the most irresponsible measure that I ever was asked to vote on."

Not just irresponsible. Criminal. Can you imagine if a private insurer tried something as outrageous?

Of course, this isn't really a "gamble" at all. Florida lawmakers know good and well that if a whopper were to sock the Florida coast, Congress will be all too happy to pick up the tab. Anyone who objects will be ostracized as a cold-hearted hurricane victim hater, and "objectively pro-hurricane."

Remove all market incentives to steer clear of areas prone to natural disaster. Bail out victims with taxpayer dollars when entirely foreseeable disaster inevitably hits. Lather. Rinse. Repeat.

This is how government creates catastrophe.

Comments

|2.21.07 @ 11:06AM|#

To say this is idiocy is an insult to idiots.

GinSlinger|2.21.07 @ 11:08AM|#

de ja vu?

Andy|2.21.07 @ 11:09AM|#

I live in Washington, DC. This is a very crowded area, and as a result, space is scarce. I pay very high prices for a very small living area. Now, normally, I would be forced to make a choice between moving out of the city, where land is less scarce, to achieve more cost-effective living, or paying the extra cost for the convenience of my commute. No longer!

Florida has given me a brilliant idea. Henceforth, it is the government's responsibility to ensure that I get what I want, no matter how irrational it may be! So, it's only fair that I should get a "backyard" fund, which the government will use to help pay down my costs to get a house with an actual yard. This way, I can get what I want, and someone else will have to pay for it. A huge thanks to the brilliant residents of Florida for coming up with this plan, and my condolences to the last guy smart enough to get in on this who ends up having to pay for everything. Let's all hope he's loaded.

Dave W.|2.21.07 @ 11:12AM|#

That makes it especially unfair, critics argue, to inland and upstate Floridians, who could be asked to help pay to help bailout riskier coastal areas in South Florida.

Smart people might interpret this as the Florida's way of saying, "Hey, dumbass. It isn't economically advantageous to live in inland and upstate Florida. Better to look elsewhere."

Florida lawmakers know good and well that if a whopper were to sock the Florida coast, Congress will be all too happy to pick up the tab. Anyone who objects will be ostracized as a cold-hearted hurricane victim hater, and "objectively pro-hurricane."

So, Florida is trying to strategically squeeze money out of places that aren't Florida and is likely to be rewarded economically for doing that. This makes Florida dumb how? Seems smart to me.

If happening people who pay taxes and make business wanted to lie in inland or upstate Florida, then it is not clear why they would not like in Arkansas or new Mexico or Texas instead. Florida wants the people who like South Coastal Florida (I hear its nice), but doesn't want to bear the hurricane risk of having them live there. So Florida figured out a way to do this.

I don't think the answer is to try to talk Florida out of sound economic strategy. I think the answer is to make changes such that congress will not be happy to pick up the tab. that is where the advocacy and lobbying should be directed.

dave W.|2.21.07 @ 11:13AM|#

"to lie in inland or upstate Florida, then it is not clear why they would not like in Arkansas or new Mexico or Texas instead."

should have been:

--to live in inland or upstate Florida, then it is not clear why they would not live in Arkansas or new Mexico or Texas instead.--

My spell checker missed those.

|2.21.07 @ 11:16AM|#

Sounds like a job for Welfare Queen

|2.21.07 @ 11:16AM|#

We can just attribute all the costs to "global warming".

You know, we really need to do something about "global warming" since it's going to produce so many disasters. And oh, here are hundreds of billions of dollars to rebuild your homes that are practically guaranteed to be destroyed.

|2.21.07 @ 11:17AM|#

If I climb a really tall tree in my yard I can see the water of Tampa Bay and my insurance premium is not at all unreasonable, especially given the value of my house. Of course my home is block and the wind damage deductible is a beauty. The areas that are really seeing huge premium increases are finite and close to the coast. Apparently the occupants of these hurricane magnets feel perfectly justified asking others to pay their freight, both in Florida and elsewhere.

As with the health insurance "crisis" the problem is not a lack of government involvement but intrusion in the first place. That and the belief that people are entitled to essentially free health and homeowners insurance. Insurance regulation in Florida has prevented the existence of a functioning marketplace with risks and rewards. The media has made sure to find people who consider themselves helpless victims of the insurance companies, who had no choice in their current circumstances but have no interest whatsoever in re-locating. This is a pure transfer payment.

|2.21.07 @ 11:19AM|#

Oh, absolutely, DavidW, the biggest idiots are us, for letting our Congresscreeps provide the subsidy.

|2.21.07 @ 11:25AM|#

Will Allen and Dave W are exactly right. Of course good luck in having an intelligent conversation about this. We currently wasting billions to fix the levies in New Orleans, even though the soil conditions probably make them unfixable, and billions more to rebuild homes that are guarenteed to someday flood again because if we don't it is only because Bush hates black people. It is not just in Florida and NO, it is everywhere. I heard a report on NPR this morning about an entire subdivision in Sacremento California built on a flood plain behind defective levies. The developer got rich and some day we the tax payer will be stuck paying to rebuild homes that shouldn't have been built in the first place.

|2.21.07 @ 11:26AM|#

Also, given the importance of Florida to recent electoral college results, what are he odds of any discipline at all coming forth from D.C.?

|2.21.07 @ 11:33AM|#

Smart people might interpret this as the market's way of saying, "Hey, dumbass. It isn't safe to live here. Better to look elsewhere."

I was born and raised in Florida. I still live here. And it's relatively safe. And I've been through numerous hurricanes that passed right over wherever I happened to be living at the time.

I was on the east coast for Dora in '64 (first one - I was 1 at the time), panhandle in '69 for Camille (scariest one ever), back on the east coast for Hugo in '89, Andrew in 92, Floyd in '99, Frances in '04 and numerous others throught the years.

Experienced very little property damage and no personal injury in any of them, thank God. Point is, while there are hazards to dealing with hurricanes ala living in Florida, they are not as prevalent as one might think through all the hysteria. Most people get little more than debris in their yards and occassional broken windows.

Much of the damage from the worst one, Andrew, resulted from shoddy bulding practices.

The problems come, by and large, from poor legislation, stupid citizens, venal insurance companies and a pathetic federal government...just like everywhere else.

Also, Florida isn't alone. Mississippi, Louisiana, Texas and South Carolina have all been hit pretty hard over the years.

Alabama, Georgia, North Carolina and on up to New Jersey as well, though not as bad.

There isn't a place in the country where there isn't some life or property threatening issue. Oklahoma to Wyoming have tornadoes, California has earthquakes and wildfires. And if it isn't those, some company is dumping dioxin in the drinking water or punks are sticking guns up people's asses.

So please, enough with the "why do you dumbasses live where it isn't safe" bullshit. It is safe, asshole. Probably, no more hazardous than where you live.

Stick to the politics - which is the real problem.

Dave W.|2.21.07 @ 11:33AM|#

Also, given the importance of Florida to recent electoral college results, what are he odds of any discipline at all coming forth from D.C.?

Then we reform the electoral college so that it is one dollar, one vote.

For example:

If your state's citizens pay a total of $10 in federal taxes, and receive (thru welfare, gov't contracts and bridges) $10 in federal benefits, then that state gets zero votes in the electoral college.

If your state pays in $10 and takes out $5, then your state gets five votes.

If your state pays in $5 and takes out $10, then your state gets negative five votes.

That way states will be incentivized to set things up so that they pay the federal government more than they take out.

It probably also means that the Democrats get a lock on the White House for a long while, but I am up for that.

|2.21.07 @ 11:41AM|#

"Anyone who objects will be ostracized as a cold-hearted hurricane victim hater"

Sign me up.

|2.21.07 @ 11:48AM|#

Hey, dave, I'm fine with that, as long individual citizens have their votes weighted according to how much they pay in taxes.

Dave W.|2.21.07 @ 11:55AM|#

Hey, dave, I'm fine with that, as long individual citizens have their votes weighted according to how much they pay in taxes.

what about the argument that runs:

"Hey, dumbass. It isn't consistent with political enfranchisement to live here. Better to look elsewhere if you really care about that."

Let's say you are a business owner in a state that gets beaucoup government contracts, well beyond what you and the other citizens pay in taxes.

Who is subsidizing your customers? If it is people in another state, then why should you get as big of a vote as they do?

fyodor|2.21.07 @ 11:57AM|#

So please, enough with the "why do you dumbasses live where it isn't safe" bullshit. It is safe, asshole. Probably, no more hazardous than where you live.

Well if it costs more to insure against danger, then I'd say it's a relatively safe wager it's not as safe. At least in terms of the types of danger one can insure against. (Aside from the effects of differential regulation, of course.)

That said, I have no idea how disaster insurance premiums differ across the country. They may not really be more expensive in Florida, for all I know. You'll have to excuse us, however, if this story gives the impression that they most certainly are, or at least are becoming so.

I should add that I think the implication is not so much you're a dumbass for living in Florida as that you're a dumbass if you think you can legislate away risks that you don't want to pay for in a free market. We all accept a different of pros and cons in whatever choices we make. There are folks who do all sorts of things for fun and leisure that surely dwarf the amount of danger of living in Florida. I think few here would call skydivers, for instance, dumbasses unless they complained about how they couldn't afford to get their dangerous activities insured.

All that, it may not be so dumb after all if the federal government can be counted on to bail out Florida when the disaster bill comes due. In which case it's only unethical. And even then it's a type of unethical that most members of our society visit upon others all the time. In fact, that's practically the justification!

|2.21.07 @ 11:58AM|#

"So please, enough with the "why do you dumbasses live where it isn't safe" bullshit."

I don't believe that the crux of this discussion is that there aren't other unsafe places to live. The main point is that you assume the risk when you choose to live wherever you live. If I am a poor driver with a couple of tickets an an accident on my record, then I, and I alone, should be held responsible for the increase in insurance premiums associated with the increase in risk. It's ludicrous to expect that the state (read: everybody else) should be responsible for my being a higher-than-normal risk.

Sure there are lots of perks to living in a state where it's always warm and there are three NFL teams to root for. However, being bailed out by me (in MD) in the event that your home is damaged should not be one of those perks.

Dan T.|2.21.07 @ 12:03PM|#

It's ludicrous to expect that the state (read: everybody else) should be responsible for my being a higher-than-normal risk.

Unless society realizes that we need some people to live in high-risk areas, for example New Orleans which is the center of the world's largest port system.

|2.21.07 @ 12:09PM|#

With all respect to fyodor and pi guy, if it's not the crux of the post, then why is this is the second day that a Reason writer has made a point of connecting living in Florida with being unsafe and its residents stupid?

I don't know any other way to read the phrase, "Hey, dumbass. It isn't safe to live here."

For the record, I have gone out of my way to declare the Crist plan as idiotic. I can also tell you that a lot of Florida folks are less than impressed as well.

I'm tired of the moronic insult is all.

|2.21.07 @ 12:11PM|#

"Unless society realizes that we need some people to live in high-risk areas, for example New Orleans which is the center of the world's largest port system."

Then the owners of the docks and other support services [not "society"] pay their employees sufficiently to compensate for the risks and costs of living in a high risk area.

|2.21.07 @ 12:15PM|#

Unless society realizes that we need some people to live in high-risk areas, for example New Orleans which is the center of the world's largest port system.

Excellent point. Florida has 2 growing seasons and is one of the largest agricultural and meat producers in the country. Our growth has helped fuel the national economy through lending, building and new businesses. We also have large ports, international airports, a wealth of national and international businesses.

And then there's tourism. Florida is a major destination for most of the country. If it's so dangerous, why does everyone want to come here?

|2.21.07 @ 12:18PM|#

As another Tampa Bay resident, I also find that my rates are not ridiculous. But much of the current crisis was CREATED by the Florida Legislature, and they have just made it worse.

First, they worked closely with the insurance lobbies to ensure that only the big six of homeowners are qualified to write coverage in Florida. They've created an oligopoly to start.

Second, they created the state run Citizens Insurance, as an insurer of last resort to pick up all of the people that the commercial carriers do not want. State law prevents Citizens from being competitive. They must charge higher rates than the commercial carriers.

So the big six have a lock on the market, and they can drop anyone they want, and the state must pick them up. When the state picks them up, their rates skyrocket. The naturally high Citizens rates give the commercial carriers room to continue to raise their rates.

Another thing I have to fault somewhat is the conversion of all of the insurance companies from mutual companies to publicly traded companies that must show a profit every quarter to keep the stock price up. As a result, they raise rates defensively, and cut out a lot of subscribers that would be higher risk. For example, they raised rates significantly after our 4 hurricane year a few years ago. Then they raised rates significantly after Katrina and Wilma. But this year, no hurricanes made landfall in Florida. Insurance companies will report higher profits because the higher rates did not correspond to higher claims.

However, for next year? Rates will not be dropping because there were no hurricanes. Instead, they will be going up, since the hurricane models call for average to slightly high activity for next year.

There was even a 'trade show' recently where the different modeling software presented to the insurers to gain them as subscribers to their models. They had incentive to present higher activity models to the insurers since the insurer is more likely to purchase a model that allows greater rate increases.

So the Florida Legislature has created a nice little insurance company haven here where they face no competition at all, and they can raise rates to their hearts content!

Dan T.|2.21.07 @ 12:21PM|#

Then the owners of the docks and other support services [not "society"] pay their employees sufficiently to compensate for the risks and costs of living in a high risk area.

Or find poor people who will work for less than that and remain uninsured. What then, when a disaster strikes?

|2.21.07 @ 12:21PM|#

Dave, why should someody who pays $600 a year in taxes have as much power regarding what activities the state engages in as someone who pays $60,0000 per year in taxes? I have no problem with your proposal, I just want it broken down to the level of the individual citizen. If you want to have a more influence over government actions, relative to other citizens, start paying for a higher percentage of government actions, relative to other citizens. If you aren't paying for anything, shut up, please.

Alternatively, we could agree to strictly limit government actions, especially national government's actions, to an extremely short list, and give everybody's vote equal weight. If we are going to have national government engage in a very wide scope of actions, however, thereby limiting the ability of people to vote with their feet, heck, let's get rid of the elctoral college altogether, as long as the guy paying $60,000 a year to support the Federal Government has his preference for President proportionately weighted, compared to the preference of the guy who pays nothing to support the Federal Government.

Better yet, make the vote's weight dependent on the net contribution. If Sam Sugarbeetfarmer gets 100k in subsidies, and pays 20K in federal taxes, he gets no vote. Joe

|2.21.07 @ 12:24PM|#

Then the owners of the docks and other support services [not "society"] pay their employees sufficiently to compensate for the risks and costs of living in a high risk area.

Exactly. And the cost of the services provided through the port of New Orleans can be passed on to the people who consume them. People can then decide just how important New Orleans is by speaking with their pocketbooks rather than their "representative".

Or find poor people who will work for less than that and remain uninsured. What then, when a disaster strikes?

There are plenty of alternatives.

|2.21.07 @ 12:27PM|#

Oh, yes, yes, dan, without Federal flood insurance, and disaster relief, there would not be a functioning port at the conjunction of the Mississippi River and the Gulf of Mexico.

Sheesh. Go run for the Florida legislature. You'll fit right in.

Dave W.|2.21.07 @ 12:29PM|#

Dave, why should someody who pays $600 a year in taxes have as much power regarding what activities the state engages in as someone who pays $60,0000 per year in taxes? I have no problem with your proposal, I just want it broken down to the level of the individual citizen. If you want to have a more influence over government actions, relative to other citizens, start paying for a higher percentage of government actions, relative to other citizens. If you aren't paying for anything, shut up, please.

because I think that government "net payments" (for lack of a better term) to states trickle out over the entire state, and are not limited to the people who directly receive them.

One area this is tricky, though, is federal government payments to corporations with out of state shareholders. if the federal government contracts out $10 worth of work to a Halliburton facility in texas, then how much of that $10 are the people of Texas deemed to have received, and how much have the various states of Halliburton shareholders deemed to have received. Although this is a difficult question, i think it is worthwhile to try to answer it fairly.

But the outcome I definitely want to avoid is one where you set up your Circle K next door to the Halliburton facility and still enjoy full franchisement. because, ultimately, I am the one paying for those Slurpees you sell.

|2.21.07 @ 12:32PM|#

Clearly, dave, the only practical thing to do is to limit the actions of national government to those enumerated in the document which founded it.

Andy|2.21.07 @ 12:44PM|#

Madpad,

I don't think it's linking living in Florida to being an idiot, it's linking living in Florida and not wanting to assume the risks to being an idiot. The line follows the assertion that people who can't pay the insurance to live on the coast's first reaction is "Someone else should have to pay my taxes! (assume my risk)" rather than the repeatedly quoted line regarding asses of questionable intelligence.

Furthermore, I think you actually answered your own argument in your post. Yes, Florida is gorgeous. Yes, people want to come there. This is because of the same weather that causes hurricanes. To wit, you enjoy tourism dollars because of this weather (and as such, increased risk.) So you get great weather, year-round, and increased state income. This is good. You're fine with that. But with the good comes the bad (higher risk, higher insurance). Suddenly, it's someone else's problem.

Now, this other gentleman in Idaho, he says Florida is a great place to visit, but I'm not willing to take the chance of living there due to the hurricanes. That's fine, that's his choice. He misses out on the weather and money. But then for Floridians (through their legislature) to come back and demand that the rest of the country subsidize the risk that they are taking is ridiculous. It makes no more sense than Iowa demanding that the rest of the country pay to build a giant dome to recreate Florida's weather over the state.

And, as mentioned above, if something is hazardous but worthwhile, then it should get paid that way. Oil drilling, for example, is a very hazardous profession. It comes with all sorts of risks. But it gets done, because oil companies offer salary to compensate for those conditions. Why should "running the port" or whatever the heck you can only do in Florida (none of the things you listed, of course, were even remotely exclusive to Florida) be any different?

|2.21.07 @ 12:51PM|#

For once , I like one of Dave W's ideas!

Because the federal Govt spends much more money than it takes in in the form of taxes, I would expect that practically every state pays less money in taxes than it rakes in in the form of payments.

Wouldn't it be great if one could not get a president elected because there were no states that were allowed to cast votes in the elctoral college ;)

OK, it's a sucky idea - but provides an entertaining vision.

Dave W.|2.21.07 @ 12:53PM|#

Wouldn't it be great if one could not get a president elected because there were no states that were allowed to cast votes in the elctoral college ;)

with deficits being what they are, i guess that's true enough. But we can still have an electoral college where the number of votes you get is is proportional to your state's "take."

dave W. responds to JD|2.21.07 @ 1:02PM|#

Smart people might interpret this as the Florida's way of saying, "Hey, dumbass. It isn't economically advantageous to live in inland and upstate Florida. Better to look elsewhere."

Or, to put it another way for JD's sake:

Smart people might interpret this as the Florida's way of saying, "Hey, rest of the world. We want some of you to move here and some of you not to move here. More specifically, we want you to move here if you are wealthy and can afford to live anywhere -- you know, the kind of people who find South Coastal Florida attractive. On the other hand, if the best you can afford is Northern or Inland Florida, then our attitude towards you is in the indifferent-to-hostile range -- feel free to check out other states and go wherever you think is best. Good luck."

Dan T.|2.21.07 @ 1:24PM|#

Oh, yes, yes, dan, without Federal flood insurance, and disaster relief, there would not be a functioning port at the conjunction of the Mississippi River and the Gulf of Mexico.


Not on the scale that it's at now.

VM|2.21.07 @ 1:26PM|#

Madpad - mellow out, dude.

You kick ass on the important parts of this sullied tale: namely the bill is idiotic, and despite the efforts of certain legislators and interest groups, the state's economy is doing quite nicely with a strong entrepreneurial spirit!

And the other parts:

If people expect that legislators can force solutions and somehow eliminate the physical risk along with the monetary one, that's crazy.

If people want to take advantage of certain economic opportunities in an environmentally-risky location and take advantage of the opportunity there, while making sure the risk they fear is covered, that's awesome. You cite exactly that entrepreneurial spirit.

Clearly there are individuals in the Gulf Coast area who choose to take advantage of this situation and profit from it greatly. Awesome, again.

Your over-the-top theatrical indignation is really too much, tho'. C'mon! I'll make the drinks, and we can laugh at the statist morons in both of our states (or in my city of Chicago).

(Fois Gras ban, anyone? And the fucktards who are in favor of it can sod off. They're morons. The Aldermen who voted for it? Morons. Etc. etc. etc)

Just point out that those who agree with the law, and potentially a great deal of the residents who applaud these measures, *are* freakin' morons.

You clearly disagree with the legislators and supporters of this bill - dare it be said that you find the bill moronic? Also, wouldn't you find the philosophical underpinnings of such a bill to be moronic, too?

Plus - FL21 had the best Libertarian Candidate running, Frank Gonzalez: clear proof that mocking (cheap shot) headlines can safely be ignored. Frank kicks ass.

Or do you work for The Ft. Lauderdale Chamber of Commerce?

(grin)

respectfully,
VM

Dan T.|2.21.07 @ 1:32PM|#

Exactly. And the cost of the services provided through the port of New Orleans can be passed on to the people who consume them. People can then decide just how important New Orleans is by speaking with their pocketbooks rather than their "representative".

That could happen. And it would mean fewer people would be able to afford those things.

So that's why it doesn't happen - the last thing we need is more wealth inequality.

|2.21.07 @ 1:57PM|#

Martinis & margarita's are on VM.

Yes, I find the thing moronic. The whole boondoggle opeates on some assumptions that may or may not come to pass and they rely on - as a final hedge - a state funded program...that cannot compete with an already small group of insurers.

The legilature can't seem to get its head around the terminable problem of state-funded programs, which is that it's coming out of MY fucking taxes.

So either way, I'm paying for the increase...it's just a less direct route.

Pisses me the bloody fuck off. The one saving grace is that I live in northeast Florida which is rarely (if ever) hit hard by hurricanes. Per the news I'm hearing, we probably won't be hit too hard starting out with increases in insurance.

Crist is also determined to pull off some sort of miracle whereby property taxes re lowered in this environment.

We'll see how it goes. See you at Pete's Bar in Neptune Beach, there, VM.

|2.21.07 @ 2:18PM|#

I for one hate hurricane victims who try to stick their hand in my pocket without my permission.

Dave W.|2.21.07 @ 2:21PM|#

I for one hate hurricane victims who try to stick their hand in my pocket without my permission.

How do you feel about Halliburton sticking its hand in your pocket without permission?

Cause, I tell ya, I was so disgusted with that that I fled. How did you deal with it?

|2.21.07 @ 2:29PM|#

Dan, you have no idea, I mean absolutely zero notion, of what shipping patterns and consumer costs would be absent federal flood insurance and disaster relief. Nobody does. Your fatal conceit is the notion that 535 hacks in Washington D.C. can optimize shipping patterns and consumer costs. You may as well expound on the generosity of the tooth fairy.

What are the sacraments in your Faith?

VM|2.21.07 @ 2:38PM|#

Sounds great!

Fois gras?

But exactly right! Whenever some fucktard comes up with The Answer, we get stuck with the bill!

Maybe we could send Gov Blago down there? Nah - we wouldn't want him back.

Too bad you're not in Fl 21 - Frank is a great guy!

cheers!

ed|2.21.07 @ 3:09PM|#

why is this is the second day that a Reason writer has made a point of connecting living in Florida with being unsafe and its residents stupid?

I believe it's called "snark"? Anyway, I've lived in SE Florida, a half-mile from the coast, for 27 years. Reports of our destruction are greatly exaggerated. Not that government intrusion into what should be a private matter isn't a bad thing. But try convincing several generations of Americans that they are not each others' keepers. Good luck. I'll wait here.

Andy|2.21.07 @ 3:21PM|#

Dave W,

Sorry, I don't know how to do the nifty itals:

*Smart people might interpret this as the Florida's way of saying, "Hey, rest of the world. We want some of you to move here and some of you not to move here. More specifically, we want you to move here if you are wealthy and can afford to live anywhere -- you know, the kind of people who find South Coastal Florida attractive. On the other hand, if the best you can afford is Northern or Inland Florida, then our attitude towards you is in the indifferent-to-hostile range -- feel free to check out other states and go wherever you think is best. Good luck."*

I don't really see your point here. That it's somehow repugnant to tell people who can't afford to live somewhere that they should probably try somewhere else? I mean, I'd love to live in a mansion, but I can't afford it, so I don't. Is the government supposed to be ensuring that I can have that, because I want it? I mean, what's your alternative here?

|2.21.07 @ 3:21PM|#

I love Fois Gras, VM...give me a proper Beef Wellington and I'm in heaven. I also dig good scotch and caviar.

By FL 21 do you mean district 21 (Miami-Dade-Broward). Don't get down that way much, but I spent some time in Hialeah smack in the middle not longer after the Mariel boatlift.

and good point, ed

ed|2.21.07 @ 3:48PM|#

One other point: Aren't the people who (rightly) bemoan government intrusion into private matters the same ones who relentlessly vilified said government for not "doing something" quickly enough after Katrina? Sometimes libertarians like to have their cake and eat it too.

Andy|2.21.07 @ 4:06PM|#

Ed,

A whole host of points. To begin with, it's not that we're trying to convince people they aren't their brother's keeper, libertarianism has nothing against people helping people - just that the government is an odd and unnecessary middleman for that help. Though your general point, which is that that point is a significant one and difficult to make is well-taken, and we appreciate the good luck. But if you aren't going to help convince people, could you at least get us a soda, we're kind of parched.

Next, criticizing the government for a total failure in the wake of Katrina is in no way a contradiction. The government has set itself up to be in charge of disaster response, then totally failed to do what it promised to do. In fact, such criticism makes perfect sense - if the government can't be bothered to deliver on a promise to shelter its own people during an emergency, well, one is forced to wonder why exactly we have one at all.

Additionally, the government was actively PREVENTING private and NGO relief sources from helping in the wake of Katrina, while continuing to refuse to step up to the plate and provide assistance to those who needed it. It's exactly that kind of heavy-handed paternalistic mentality that libertarians are decrying when we bemoan government intrusion.

Also, expecting the government (as it exists) to minimize intrusion into one's personal life whenever possible and simultaneously to aid its citizens in the wake of a disaster aren't contradictory points. Whether you're a libertarian, a democrat, or a un-potty-trained baby labradoodle.

|2.21.07 @ 4:47PM|#

Yeah, because it's so easy to just up and move one's family after building a life somewhere. Most people in FL never paid more than around $700 a year in property insurance, and suddenly they are being forced to pay $4,000 a year (a not uncommon occurrence in South Florida).

I'm with you in principle, and the whole mess would work itself out if the legislature stayed away from the insurance industry, but to simply say to FL residents "hey, dumbass, move" is kind of stupid.

Andy|2.21.07 @ 5:15PM|#

Absolutely. Moving is inconvenient. But does that mean the rest of us should be paying the difference?

|2.21.07 @ 6:07PM|#

Andy,

Of course not, which is why I said I agreed with Radley in principle, and said that the whole thing could be solved if government got out of the way (including, of course, subsidizing risk). The only point I was making is that simplifying a very complex issue down to "move, dumbass" is, like I said, kind of stupid.

And moving is invoncenient, but it's also cost prohibitive for many people. People who have lived here their whole lives and are barely making ends meet deserve something other than a yankee like Radley snottily demanding they move to "safer" areas.

Insurance rates are going up because insurance companies perceive greater risks due to perceived increases in hurricane activity. As a result, re-insurance rates are going up. But now the state won't let insurance companies raise their rates to make writing certain policies profitable, so many insurance companies simply aren't writing new policies, which in turn drives the price higher. Now, Florida has decided it would like to be the re-insurance agency for all insurance companies, which will bring in a host of new problems. Also, insurance rates tend to lag about a year behind risk factors, so next year's rates will likely come down after this past summer's mild hurricane season.

The solution? It's messy, and costly, and it will hurt a lot of us, but just like in other areas, we have to let prices do their job.

VM|2.21.07 @ 6:13PM|#

Hi Madpad!

Agreed about fois gras. and, yes, 21 is down there. Frank Gonzalez was in the LP of Illinois a few years ago. He and Matt Beauchamp ran terrific campaigns, and I even managed to convince some old time Chicago Democrats to vote for them!

Whenever Mrs. Moose and I are out of the city, we see if fois gras is on the menu.

The Deerpath Inn in Lake Forest has a good serving!

Hear hear on the scotch and caviar.

Probst,
VM

Dave W.|2.21.07 @ 6:53PM|#

I mean, what's your alternative here?

There should be a law that gives standards for what disaster relief will be given by the federal government. For hurricanes, floods, tornadoes, plant closings, terrorist strikes and the like. By crafting standards, we can make sure that disaster relief monies are doled out fairly and not used as a political football repeatedly kicked into our heartstrings.

Cato should write it and Mr. Balko should shill for it. Instead of trying to act like Florida politicians have some kind of duty beyond their selfish interests. Cause they don't and never will.

bill|2.21.07 @ 8:48PM|#

The only problem is, is that there isn't anywhere in this country that isn't prone to SOME kind of natural disaster. I think there is one little corner of Arizona that doesn't get blizzards, hurricanes, tornadoes or earthquakes, but it does get hot as hell. So I guess we have to build one giant city there and everybody has to move to it.

Greg Newburn|2.21.07 @ 11:12PM|#

Right, Bill, but hurricanes are by far the most destructive single event disaster, insurance wise. Hurricane Ivan alone created 25 million insurance claims in S. Florida.

|2.22.07 @ 11:19PM|#

Well, earthquakes are more destructive, but theyre also far more rare, and the damage is generally excluded from standard homeowners policies. Typically, you have to either pay extra for an earth movement endorsement, or buy a completely separate policy, often sold only through a publicly administered pool (the biggest one being California Earthquake Authority, which derives its funding through pro rate assessments on private insurers.)

There are plenty of potential terrorism scenarios that also have price tags that dwarf any potential natural catastrophe, and in some cases, can be double or triple that total capacity of the entire global property insurance market for all risks.

But generally speaking, youre right. There is no comparison between hurricanes and, say, tornados or fires or hailstorms. All can be destructive, but hurricanes cause huge numbers of correlated losses, which is a whole different animal than the isolated damage -- however awfully destructive -- that can be done by a twister.

Someone upthread mentioned something about insurers demutualizing. That was a trend for life insurers for a while, but its not terribly relevant to the property market, and particularly not the homeowners market. Among the top homeowners insurers, Allstate, Farmers and Travelers were always public companies (Allstate was a part of Sears before it was spun off) and the other big guns -- State Farm, Nationwide, USAA, Liberty Mutual -- are still mutual insurers today.

As to the issue of insurance and global warming, here are a couple of articles for you:

http://www.earthinstitute.columbia.edu/grocc/documents/Mills_Hurricanes.pdf

http://www.tmcnet.com/usubmit/-lloyds-chairman-says-prospect-costly-storms-requires-free-/2007/01/12/2242866.htm