Environment & Energy
Related: About this forum"Market Of Last Resort" Guarantees All NC Residents Will Help Pay For Coastal Residents' Losses
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Today, the Coastal Property Insurance Pool, which was created by North Carolina legislators and is run by a nonprofit association of commercial insurers, insures more than three-quarters of all coastal property. As of June, the beach plan, as its called, had 198,039 coastal policies representing roughly $74 billion in potential liability. Over the last 12 years, the plan has taken on an additional $20 billion in exposure.
There are safeguards: Private insurers promise to pay a portion, and the plan has a reserve fund and buys an insurance policy of its own. But if a large enough coastal disaster strikes, every person who insures property in North Carolina, from tobacco farmers hundreds of miles from the coast to the wealthy second-home owners who chose to build stilted cottages dipping into ocean waves, will also have to help foot the bill. North Carolina officials say that is unlikely to happen. They say the plan is prepared to handle billions of dollars in losses, and they also point to historical trends that show the worst storms have occurred inland, and not on the coast. The North Carolina Insurance Underwriting Association, which administers the coastal insurance pool, said it believes that it is prepared for a major storm or series of storms. Alvin Ashworth, the associations assistant general manager, said via email that based on analysis of multiple weather models, the organization had concluded that the likelihood of a storm disaster big enough to trigger the statewide surcharge was nearly de minimis, or so low that it that it hardly merited consideration.
But climate change has made those patterns less reliable predictors of future weather. Scientists and experts who work with data to predict storm patterns for the insurance industry all say future storms will be stronger and develop faster. Recent research even suggests a Category 6 may be in the making the strongest hurricanes are currently rated as Category 5.
Hurricane Harvey, which deluged Houston and the Texas coast, is ample evidence of the limits of traditional storm prediction. The storm and the ensuing floods which had less than a 0.2 percent chance of occurring in a given year and had no historical precedent caused around $125 billion in damage, including the $19.4 billion in insured losses. While much of the destruction was caused by flooding, which is covered by a federal insurance program, the scale of the storm was enough to make any state reconsider even the best-funded plans. Harveys insured losses were more than five times more than what North Carolinas coastal plan is currently financially prepared to handle. So if a storm with comparable consequences struck North Carolina, tens of billions of dollars in costs could be spread among every insurance customer in the state for years.
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https://www.propublica.org/article/hurricane-florence-north-carolina-potential-insurance-bill-last-resort-plan?utm_campaign=sprout&utm_medium=social&utm_source=twitter&utm_content=1537215824
littlemissmartypants
(22,797 posts)mountain grammy
(26,648 posts)What could go wrong? Global Warming thats what.