[GWSG] Uninsured property risk

[Tilley, Al]

Florida's Citizens Property was founded in 2002 in the administration of Jeb Bush. It was intended to offer insurance to coastal property owners who could not find a commercial insurer. Insurance was hard to come by because risk was driving insurance costs beyond reach of the current market. Citizens Property passed that risk on to, as the name indicates, the citizens of Florida. If a disastrous hurricane were to exhaust the resources of Citizens Property, all property insurances owners in the state would be assessed per capita so that all homeowners would be required to pay the same amount, no matter what their resources. A webinar organized by the Environmental Law Institute (ELI) this week reported that a recent study found that a major hurricane in Miami would now result in a $60,000 assessment of the state's homeowners.

So-called Fair Price insurance like Citizens Property, actuarily unsound as it is, may be found in 36 states now. In 21 of those states, according to the ELI's webinar, it is not even stated where the overrun cash would come from. A good guess is that the states will seek federal relief, and everyone would be asked, in effect, to support the uninsured risk of others. The bill could be fierce and destabilizing.

Obviously, many people in Florida would be bankrupted by a $60,000 assessment; many more will be reluctant to support beach property owners. As our failure to cope with the climate crisis is now driving a mounting number of property disasters, the cumulative financial risk is taking the shape of a national crisis. Senator Sheldon Whitehouse has requested from Florida the data to support a public analysis of the situation in that state; apparently 35 other states await attention. https://thinc.blog/2024/03/20/senators-probe-florida-insurance-fund-for-climate-risk/

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