![]() ![]() In both states, private insurance markets never fully recovered. Thirteen years later, Hurricane Katrina unleashed a home insurance meltdown in Louisiana. Some insurers went bankrupt, others pulled back, and the price of insurance rose for homeowners. In the decades since the program's creation, climate change has made other types of disasters, like hurricanes and wildfires, more unpredictable and expensive too, which is slowly undermining private insurance markets state by state.Īfter Hurricane Andrew caused an estimated $26 billion in damage in Florida in 1992, the state's insurance market was "falling apart," Marlett says. The program is backed by taxpayer dollars, but it is chronically in debt and is increasingly unaffordable for homeowners because it wasn't designed for the enormous climate risk that the U.S. That led the federal government to create the National Flood Insurance Program in 1968, and it now provides the vast majority of residential flood insurance in the U.S. "They didn't have maps or statistical basis to calculate what the premiums could be, which is the bread and butter of insurance, and partly because, I think, of an intuition - probably true - that if they could figure it out, no one would be able to afford it." That's because it's complicated to figure out which places will flood and how often those floods will occur. insurance market happened decades ago when most companies stopped covering flooding.Ĭompanies decided flooding was "uninsurable," says Don Hornstein, a professor at the University of North Carolina School of Law. This crisis has been a long time in the makingĪmerican insurers already have a history of cutting back coverage in the face of disasters. But mounting damages have led many home insurance companies to stop offering insurance policies in high-risk areas, or to even pull out of entire coastal states. Some residents in coastal areas such as Cameron Parish, La., have raised their homes and taken other measures to make them more resilient to hurricanes. "Just as a human being, if you want to be able to stay where you live or where your job is or where your kids go to school, you want to be able to rebuild your house, you have to have a solvent insurance company that provides good coverage so that you can rebuild." It's just ingrained with everything," says David Marlett, managing director of the Brantley Risk & Insurance Center at Appalachian State University. "That impacts real estate, it impacts construction, it impacts lending. So, when people can't get home insurance, or have inadequate coverage, the consequences can be profound. The shrinking of home insurance options comes at a time when most American families have little in savings, and many can't get a loan to repair a house that's damaged or destroyed. The United States is "marching steadily towards an uninsurable future," says Dave Jones, a law professor at the University of California, Berkeley and the state's former insurance commissioner.Īllstate wouldn't comment on Pratt's case. The state is grappling with a home insurance crisis in the wake of repeated climate-driven storms. Southwest Louisiana's Cameron Parish was badly damaged by Hurricane Laura in 2020. It leaves us feeling extremely vulnerable." "But to just drop people - you know, it's scary. Earlier this month, Pratt got a letter from Allstate, her home insurer of 31 years, saying her coverage was being dropped because of the threat from wildfires. Pratt says she emptied her savings to make her "home for life" fire resistant.īut it didn't matter. So Pratt did what homeowners in fire-prone areas are supposed to do: She added a metal roof, traded wood decking for laminate, installed a water tank and a fire hose, and cleared vegetation near her house. Many residents in the area are losing their home insurance because of rising wildfire risk.īig wildfires had started burning more often in California, creeping closer to Beth Pratt's home near Yosemite National Park. A row of mailboxes tagged with evacuation notices during the Oak Fire in Mariposa, Calif., in July 2022. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |