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Insurance is failing hurricane survivors: ‘People thought they were covered’
(www.theguardian.com)
Insurance is a straight up scam. In every case.
this post was submitted on 12 Oct 2024
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How the heck is that even possible? I was forced to get flood insurance on a house that's nowhere near an ocean just because there is a stream nearby that almost never even has water in it. Getting a damn LOMA processed is confusing as all hell. Do 90+ percent of people not have a mortgage or something?
Mine and flooded twice in the last 4 years. Last time I got a sump pump out in, both time insurance would not help and I can't get flood insurance as I'm not in a flood zone. FEMA helped me out both times though.
That's so weird because my house is literally on a lake and I didn't have to get flood insurance. I had to look up all of the flood maps and saw that the chance of flooding is once every 1000 years.
NOAA (I think) updated flood predictions and the flood line moved slightly toward my house. Still no flood insurance required.
But but but FEMA!
Some of those people who did have flood coverage will only have it because they have a mortgage and were legally obligated to buy it as a condition of getting a mortgage (that is, it protects the mortgage lender's equity). It looks like the federal government requires people who live in a flood risk area and get a federal mortgage to buy flood insurance, for example:
https://sgp.fas.org/crs/homesec/R44593.pdf
An area of specific focus on the FIRM is the Special Flood Hazard Area (SFHA). The SFHA is intended to distinguish the flood risk zones that have a chance of flooding during a “1 in 100 year flood” or greater frequency.
Any federal entity that makes, guarantees, or purchases mortgages must, by law, require property owners in the SFHA to purchase flood insurance, generally through the NFIP.
Insurance companies get away with the most fucked up shit as a matter of course and nobody holds them accountable.
Insurance companies have a conflict of interest inherent in their business model. They make money by taking your money up front and then paying you back as little as possible at a later date. Any way to weasel out of paying up, especially in a big event like a hurricane, is a huge money saver for them. And most people are desperate. Their house is gone. They aren't in a position where they can argue and sit on the phone for hours and work it out.
And then, even if they do pay out, they just jack up your rates to make it all back. That's if they don't just drop your coverage completely.
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Private insurance used to offer flood insurance like 100 years ago, but to stay in business they had to raise premiums to a point where no one could realistically afford it (which is to say that living in a flood zone is not financially feasible for most people). The government had to step in with their own flood insurance program, which was tied to regulation intending to minimize the risk of flooding in at-risk zones so that premiums could remain affordable. Even these measures haven't been sufficient to keep the program from running out of money, and we've been subsidizing it with taxpayer bailouts to keep it afloat.
All this is to say that private insurance is literally incapable of insuring against flood damage, so you can't blame them for any of this. If you want to blame someone, blame Trump for rolling back standards that would have allowed FEMA to consider climate change in their risk models.
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Their entire business model is fucking people over.
We need some kind of ACA for regular insurance, where unless people are literally building in a swamp or the bottom of a crater near a lake/river they should be just automatically covered.
So no Florida coverage? As well as a good bit of the south east and new Orleans is swampy.
Florida is uninsurable, that's kinda the issue.
There's a reason so many big insurance companies have left Florida. And honestly I don't really want even more Federal money going to rebuild in the most common path of ever rising hurricane intensity.
I want Federal funds set aside to move people out of Florida in homes elsewhere for those who want it. If you want to rebuild your house in the path of the hurricane you can do it on your own dime.
Not sure how we relocate basically everyone in the South though. And what about tornado alley, do we move all those people also? And then you have wild fires and earthquakes, do we move all of California also? I get what you are saying, but getting millions of people to move states or across the country isn't a simple thing. And what do we do with all the then empty previously "high valued" real estate? I do think we ultimately have to do something as global warming continues to cause humans issues at what seems like an accelerated rate, but we also have an alarming number of people that do not want to address it (or that even deny it happening).
Climate disasters are not affecting the world equally everywhere. Hurricanes are far and away the most destructive climate related disaster and they disproportionately affect Florida of all US states
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And what about tornado alley, do we move all those people also?
What the fuck about it?
According to NOAA, the total cost of property damage for all tornadoes in 2022 was $700 million.
The damage cost from just Helene is estimated to be $47 billion.
Hurricanes are significantly more destructive than tornadoes.
There's no place on earth that doesn't suffer from natural disasters, and it's foolish to compare hurricanes to the rest. Wildfires can be mitigated somewhat, and earthquakes aren't predictable, neither of which are true about hurricanes. But hurricanes are going to get more destructive and more frequent as the climate warms, so rebuilding where they're going to predictably continue to hit is just foolish.
And what do we do with all the then empty previously "high valued" real estate?
What about that too? If people want to continue to build on the path of hurricanes, let them. Just stop using taxpayer money to bail them out.
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A good use of money and imminent domain. A one time payment to a person and relocating them is also something the US government has experience doing, especially in Florida. Can you imagine the irony of doing it to the white folks who took over the region?
But seriously, it is an actual good idea. It would save billions in the long run and would be a good use of effort to reduce the risk of more people going broke from random weather.
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There's a UK scheme called Flood Re that does this kind of thing. If you're more than a certain probability of flooding, you need to go with an insurer that's backed by the government's reinsurance policy.
That's basically how US flood insurance works. The entire country is mapped out in flood zones based on a every 100 year occurrence. If you're in the zone you're required to buy insurance... but it's bullshit. They have a bunch of inland people paying the same rate as the people's houses that are on the coast and flood every 5 to 10 years.
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