Thursday, May 13, 2010

Have a Nice FLA Beach House? Well.....

Here's a cute one.

Rep. Ron Klein (D-Fla.) wants us to pay for the Homeowner's Defense Act (H.R. 2555), which would make federal taxpayers pick up the tab for a disastrous state-run insurance program for Florida's hurricane-prone beaches. The House may vote as soon as next week on this legislation.

There is no reason for state governments to be in the insurance business. And there is certainly no reason for the federal government to bail them out.

Instead of injecting government into the insurance markets, private landowners should buy insurance in the private market so that the owner knows the true costs of ownership.

If insurance is not available or is prohibitively expensive for development in risky coastal areas, then property owners should bear the risk themselves or those areas should be left undeveloped.

IOW:

1) Florida likes the tax-revs from beach-houses and their occupants, so they encourage people to build there.

2) In order to make it beach-house ownership feasible, Florida sets up its own casualty-insurance program.

3) Florida mis-manages the program and it is in trouble.

4) YOU pay for it!

What a country!!

4 comments:

neomom said...

I admit I have mixed feelings on your statements on this. Not saying a bailout is the solution... Getting the government a helluva lot further away from it would probably be a better plan.

I don't know enough about the Florida program or its issues, but I can tell you how it works in North Carolina - as I live in a coastal county, though a few miles inland.

76% of all wind/hail damage claims from hurricanes comes from the inland counties. With the exception of the houses on the actual beach/barrier islands/intracoastal, most here come through the storm pretty well because of the building codes with nailing patterns, roof straps, etc.

Even with that. Private insurers refuse to cover certain locations - usually up to a few miles inland. Surprise!! My home is in that zone.

That leaves the NC "Beach Plan" as our only option. I don't know what a beach house costs to insure, but my humble domicile costs more than 3X to insure - just for wind and hail - than my insurance did in WI for a similar residence. The Beach Plan also carries a 3% home value deductible. Then I still need to carry the traditional home policy from a private insurer for fire and such.

To make it better. Our rates on both the beach plan and home policy just went up by 25-35% in the coastal counties so that our state insurance commissioner could lower the rates for the more populated inland counties using the "those rich people with beach houses can afford it!" meme and buy some votes.

Note my statements about where the most damage occurs, not living on the beach, humble home, and no private coverage available.

Dad29 said...

Umnnhhhh....

I'd find the red-pencil line between 'hurricane-vulnerable' and 'NOT hurricane-vulnerable' and move.

But the FLA situation is different...

neomom said...

Turns out, the arbitrary line is a main road... We are about 200 yards on the wrong side of it..... Of course, they don't tell you any of those minor details in the relo package.

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