Storm’s Toll on Insurers Not on Scale of Katrina

RightinNYC · 09-03-08, 10:13 AM

So it turned out that Gustav wasn't that big a deal, which is good to hear. I'm not posting this article because of that though, but because of one tidbit that blew my mind.

Quote:

The industry is still grappling with what was a painful surprise for some homeowners in the wake of Katrina: the fact that standard property insurance does not cover flood damage. Some residents of the Gulf Coast did not have separate flood insurance.

Okay, so I guess I can understand that some people just didn't know this fact. I would think I would make it my business to know if I lived where there were hurricanes, but hey, it happens. Not a huge deal, they've learned from their mistakes.

Quote:

Mr. Hartwig said Katrina and two other hurricanes in 2005, Rita and Wilma, prompted a significant rise in sales of flood insurance policies. (The number of flood insurance policies in Louisiana increased substantially, from 385,000 in 2005 to 499,000 in 2007, according to the National Flood Insurance Program.)

That's great, it's good to see that people are getting smarter.

Quote:

But up to 25 percent of the policies purchased following Katrina were not renewed by the policy-holder in the second year, Mr. Hartwig said.

...

what.

What is wrong with these people? Are they idiots? "Well, geez, wasn't no hurricane in like 10 months, so I guess we don't need that flood insurance stuff, right?"

The next time a big hurricane hits, we'll hear about how these people have lost everything and didn't know that they needed flood insurance and are being victimized by the system. And I'll just sit back and shake my head.

Hatuey · 09-03-08, 10:33 AM

Quote:

Originally Posted by RightinNYC

The next time a big hurricane hits, we'll hear about how these people have lost everything and didn't know that they needed flood insurance and are being victimized by the system. And I'll just sit back and shake my head.

Maybe flood insurance got too expensive for some? The state does have a 20% poverty rate.

TOJ · 09-03-08, 10:34 AM

Why should they pay for flood insurance? The government will come along and bail them out, don't ya know?

RightinNYC · 09-03-08, 11:31 PM

Quote:

Originally Posted by Hatuey

Maybe flood insurance got too expensive for some? The state does have a 20% poverty rate.

That's one of the costs that comes with living in a flood area.

Manhattan is more expensive than Brooklyn for lots of reasons. If you can't afford Manhattan, you don't live there. New Orleans is more expensive than less urban, non-underwater areas. If you can't afford it, you don't live there.

Hatuey · 09-03-08, 11:38 PM

Quote:

Originally Posted by RightinNYC

That's one of the costs that comes with living in a flood area.

Yeah but I wasn't born rich. I built up my money. The way I've seen it, in the South, You're born poor, You stay poor. That seems to be a general rule down there however there are the exceptions. One of the costs of living in Compton is the fact you might get randomly shot by some gang member. Does that mean people should move to areas with less gang activity? Obviously not because those areas in California are either ridiculously expensive(see Beverly Hills) or so far removed that it would cost more to travel from them to your work place then it would to simply live with the violence.

Quote:

Manhattan is more expensive than Brooklyn for lots of reasons. If you can't afford Manhattan, you don't live there. New Orleans is more expensive than less urban, non-underwater areas. If you can't afford it, you don't live there.

Alright 2 GIANT flaws in this logic.

1)If people move to less urban, non-underwater areas, in a state where as it is people have trouble finding jobs(20% unemployed), then on what capacity do you think they'll have less trouble finding jobs in areas with less urban development?

2)New Orleans isn't New York City. It's not even remotely close. A person can move outside of New York City and still find a thousand corner stores in the area that would hire them. Can Louisiana say the same? Obviously not or the state wouldn't have such high unemployment rates.

RightinNYC · 09-04-08, 12:02 AM

Quote:

Originally Posted by Hatuey

Yeah but I wasn't born rich. I built up my money. The way I've seen it, in the South, You're born poor, You stay poor. That seems to be a general rule down there however there are the exceptions. One of the costs of living in Compton is the fact you might get randomly shot by some gang member. Does that mean people should move to areas with less gang activity? Obviously not because those areas in California are either ridiculously expensive(see Beverly Hills) or so far removed that it would cost more to travel from them to your work place then it would to simply live with the violence.

Let's say that VT has a history of getting attacked by mutant trees. It's highly recommended that you get mutant tree insurance. When you were deciding whether or not to live in VT, you would consider the cost of mutant tree insurance, wouldn't you?

Quote:

1)If people move to less urban, non-underwater areas, in a state where as it is people have trouble finding jobs(20% unemployed), then on what capacity do you think they'll have less trouble finding jobs in areas with less urban development?

2)New Orleans isn't New York City. It's not even remotely close. A person can move outside of New York City and still find a thousand corner stores in the area that would hire them. Can Louisiana say the same? Obviously not or the state wouldn't have such high unemployment rates

People who are unemployed and are so poor that they can't afford the few hundred dollars for flood insurance probably don't own their own houses, so why do you think this applies to them?

Joby · 09-04-08, 12:17 AM

Like car insurance, purchasing flood insurance should be necessary for people who live under sea-level, and aren't in Death Valley.

You probably won't get in an accident, but you need to be insured because you might.

DeeJayH · 09-04-08, 12:28 AM

if you do not live in a mandatory flood insurance zone, it is dirt cheap
I live just across the street from the mandatory flood insurance zone
I opted for flood insurance because 50+% of flood damage occurs beyond the mandatory zone
my coverage is only $277/year

Hatuey · 09-04-08, 12:30 AM

Quote:

Originally Posted by RightinNYC

Let's say that VT has a history of getting attacked by mutant trees. It's highly recommended that you get mutant tree insurance. When you were deciding whether or not to live in VT, you would consider the cost of mutant tree insurance, wouldn't you?

The difference is that in VT we don't have 20% state poverty rates where the large percentages of the population is made of people who's parents and grandparents were poor. That is what makes the difference in Louisiana.

Quote:

People who are unemployed and are so poor that they can't afford the few hundred dollars for flood insurance probably don't own their own houses, so why do you think this applies to them?

What makes you think this? How many Americans own homes and don't have health insurance because they have OTHER stuff they have to pay for like a car to get to work? How many people don't have car insurance because they have to pay for other stuff like 'food'? Have you ever been poor? It's not ment as an attack it just seems to me like you don't distinguish between what they should be paying for and what they have to pay for.

Hatuey · 09-04-08, 12:39 AM

Examples of should vs have poor people face :

I should pay to get flood insurance.

I have to pay for food.

I should pay to get car insurance.

I have to pay for the kids school books.

I should pay to get the car fixed.

I have to pay water bills.

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These are off the top of my head some of the things my mom would deal with when my dad had a total income of less then $13,000 a year.