Rita, You BITCH!
Is anyone else sick of hurricane season yet? Rita is on her way, and she looks like she could become one baaaad mama-jamma. Am I out of line for asking the question, given the last decade of hurricane activity in Florida and the Gulf Coast, why would ANYONE sink their life's savings into beachfront property? I know we have some OBX property owners, so I don't mean to sound preachy... help me out, Schmoliticians.
posted by Sean @ 9/20/2005 06:12:00 PM
5 comments
5 Comments:
Insurance. Hurricanes do not devalue the land itself, they just tend to be hard on the things you build on said land. Luckily, those things can be re-built, as long as you have the wherewithal. And thanks to the insurance policy that you took out on your property, you should have the money to rebuild.
I just had a conversation with my dad about this the other night. He was saying that he doesn't understand why people continue to live in areas subject to natural disasters. And why we have to pay the cost in higher insurance premiums any time a flood/hurricane forces them to make a claim on their policies. I didn't then nor do I now have a ready answer. I suppose you could say that almost any area in the country is a potential target for a natural disaster. Certainly there are areas where the risk is greater, but almost everywhere has some risk, whether from an earthquake, tornado, hurricane, flood, etc. Outside of hurricane season, many of these coastal communities are great places to live--and it would be hard to tell someone whose family has lived in an area for generations that they need to move somewhere else. Having said that, though, if people to choose to stay in danger areas, maybe they need to shoulder some more of the risk. For example, there could be an separate isurance pool for people living on the coast so that the rest of the countries' premiums wouldn't be affected when a storm causes damage.
I just had a conversation with my dad about this the other night. He was saying that he doesn't understand why people continue to live in areas subject to natural disasters. And why we have to pay the cost in higher insurance premiums any time a flood/hurricane forces them to make a claim on their policies. I didn't then nor do I now have a ready answer. I suppose you could say that almost any area in the country is a potential target for a natural disaster. Certainly there are areas where the risk is greater, but almost everywhere has some risk, whether from an earthquake, tornado, hurricane, flood, etc. Outside of hurricane season, many of these coastal communities are great places to live--and it would be hard to tell someone whose family has lived in an area for generations that they need to move somewhere else. Having said that, though, if people to choose to stay in danger areas, maybe they need to shoulder some more of the risk. For example, there could be an separate isurance pool for people living on the coast so that the rest of the countries' premiums wouldn't be affected when a storm causes damage.
I could be wrong about this, but I think that people who own oceanfront property in areas where there is a higher risk of hurricanes do pay higher premiums. Of course, the insurance companies tend to spread higher premiums out a bit to avoid losing customers whose premiums would otherwise be "too high" (i.e. in line with the actual risk the insurance company is taking to insure them). We have certainly seen this in the auto insurance industry, where it does not cost an SUV driver much more to insure his deathtrap than it does a compact car owner, though SUVs are two to three times more likely to get in an accident, and the damage done when they do, in terms of both property and liability (i.e. when they kill people in the other car) is at least double.
Nasty.
Though I think you are right when you say that there is risk of natural disasters no matter where you live. It is just that Florida and the Gulf Coast seem to be at high risk at least once a year.
That's a great point. And it's going to be increasingly important as the baby boomer generation retires and moves to the Southeast and its coastal areas.
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