Flood Insurance

[xoxoxoBruce]

My Aunt sent me a newspaper clipping from MA that has an article about flood insurance. It seems people from Texas to Maine are being dropped in record numbers as many smaller companies are going belly up or trying to avoid it. They paid out $27.3 billion last year (can you say hurricanes) and between 1990 and 2002 they paid out $1.17 for every $1 they collected in premiums.

In recent years people near the shore have had storm-related deductibles, up to 15% of the insured value, added to their policy. Not just on the beach either, in RI it's within 2 miles of the shore. In some parts of NJ it's 5 miles. At the same time rates are going up by leaps and bounds. Ins companies have requested 50% increases in NC.

The local angle for this newspaper article is Wendy Northcross who lives in West Barnstable, MA on Cape Cod. Ms Northcross is the CEO of the Cape Cod Chamber of Commerce. I'm having a tough time believing this but in 2 places the article says her premium jumped from $800 to $1250 per MONTH. God, I hope that's a mistake. Anyway she was eventually dropped and had to turn to the state operated FAIR program that's "considerably more expensive", but they didn't say how much.

For anyone that isn't aware, no flood insurance = no mortgage.
I've always had a hard time with people building these multi-million houses on the barrier islands and having them replaced by the insurance every few years. I think after the second time they should move. I do, however feel bad for the people that have lived near the coast for generations, who have to pay through the nose or can't get a mortgage.

After I bought my house the Feds(Army Corp of Engineers) decided I live in a flood plain and I had to get flood Ins, but I haven't experienced increases like these people.