An Earthquake Impacting Home Insurance in Florida Following Hurricane Ian

If you have never listened to a podcast before, this episode of The Daily from the New York Times is one you need to start with. It is an excellent summation of the challenges that are happening right now and will build into a huge and much bigger crisis for the state of Florida and other coastal states in the coming years.

Here is the episode: “Did Hurricane Ian Bust Florida’s Housing Boom?”

I had one paragraph about this topic in a recent op-ed I shared here two weeks ago, “Op-Ed: The Answer Is Climate Adaptation”:

“In the immediate future the only moderating factor that is going to have an impact on what gets built is the insurance industry. They are the ones who are insuring the property losses being suffered. We know by experience that companies will begin pulling back on property insurance. Some insurance companies will go out of business. Policy rates will go way up, and, in many cases, companies will stop offering hazard insurance all together for those areas with the greatest risks. For those who are not buying a home with cash, they won’t be able to get a home loan.”

The above quote and much, much more about hazard insurance in Florida is covered in the podcast above. I can tell you that Florida state government is going to be “highly motivated” to come in and bail out the insurance industry, homeowners, developers and the construction industry. They already did it back in the day of Hurricane Andrew, see another recent podcast on that event that I recorded on the 30th anniversary of that storm.

The insurance industry that provides “retail insurance” to homeowners and businesses along with their re-insurance providers is definitely not made up of “climate deniers.” They recognize the threats that exist today and will continue to build as the oceans become warmer and sea rise creates more risks for coastal communities.

Businesses are in the business of making money and not subsidizing risk — only governments who don’t care about doing this will enable more risky behaviors in the future. While many red states would say they are against “socialism” and “socialistic behaviors” which take money from some to give to others, they will likely dance to a new tune and twist themselves into pretzels in order to justify their actions.

This is the same story for federal flood insurance. We continue to subsidize people living near water by “taxing” the rest of the nation to enable that risky behavior to continue.

We certainly are exceptional!