Tag Archive for: California

Insurance Companies Limit Exposure In Florida, California. Will Texas Be Next?

An article in the New York Times on July 14 listed insurance companies limiting coverage or pulling out of disaster prone states.

  • Farmers said it will limit coverage in Florida
  • Eight smaller insurers have gone bankrupt in Florida in the last two years.
  • State Farm and Allstate have stopped selling policies in California, and Farmers has limited them there.

Separately, a Washington Post investigation found that some Florida policyholders had their claims cut by more than 80 percent after Hurricane Ian last year. The headline screams, “Insurers slashed Hurricane Ian payouts far below damage estimates…”

Risks Vs. Rewards of Living Near Water

I’ve written before about how the love of living near water can outweigh the fear of consequences that sometimes accompanies it.

If you google “benefits of living near water,” you will quickly find 1.9 billion results. Many of them are from residential developers near rivers, lakes, streams and seashores. They make health and emotional claims such as:

  • Lowers stress and anxiety
  • Increases in well-being and happiness
  • Lowers heart and breathing rates
  • Healthier lifestyle.

Now google “disadvantages of living near water.” You get half that number of results. They tend to cluster around:

  • Flood damage
  • Pollution
  • Erosion
  • Increased maintenance and insurance costs

For Most People, Rewards Generally Outweigh Risks

It’s not that people don’t recognize the disadvantages of living near water. It’s just that most enjoy the benefits more. AND they figure that insurance companies will make them whole should disaster strike.

But now, at least in some states, insurance companies seem to be caught in a squeeze between shareholders and regulators. And they’re making some tough calls that will force policy holders to re-evaluate whether the rewards of living near water are worth the risks.

As I scrolled through my library of almost 50,000 flood-related images last week, I wondered how long it might be before Texans experienced the same insurance problems now facing Florida and California residents.

Our love of water, buoyed by the courageous, optimistic spirit of Texans, leads many to take risks that I personally would not take.

Bolivar Peninsula Denser than Before Ike

In that regard, I remember the Bolivar Peninsula after Hurricane Ike. Ike’s storm surge brought total destruction to 30,000 homes in 2008. See the images below these first three satellite images. The satellite images show the same area before, immediately after, and 15 years later on the Bolivar.

Google Earth image showing residential area on Bolivar Peninsula the week before Ike struck in September 2008. Note large, open undeveloped areas.
Same area day after Ike. Total destruction. See ground-level shots below.
Bolivar Peninsula today

The Bolivar today has denser development than it did before Ike. Such is our collective love of water…that we quickly forget or overlook the destruction that happened just 15 years ago. Here’s what it looked like on the ground.

Destruction on Bolivar Peninsula After Hurricane Ike

This was an excellent opportunity to buy people out and turn this area into a national seashore. But that was politically unpalatable.
Power not only went down. The entire power infrastructure was taken out.
One of the few homes left standing.

We’ve spent the 15 years since Ike studying proposals to build an Ike Dike that could protect such properties. But in June 2023, the Houston Chronicle reported that it could be 2040 before construction completion of the $34 billion project.

Until then, it’s “swim at your own risk.”

Posted by Bob Rehak on 7/18/2023

2149 Days since Hurricane Harvey