This weekend, we face the arrival of Hurricane Irma. If her projected path as of presstime holds, our 12-year stretch without a major hurricane here in Palm Beach County is about to end. Hopefully, we are all prepared, and the damage will be minimal.
It really wasn’t so long ago when South Florida was ravaged by a series of nasty storms during a 13-month period, causing billions in property damage, in addition to loss of life and frayed nerves anytime something stronger than a light drizzle was forecast.
As we reflect on the recent turn of events in Houston, plus Hurricane Irma sweeping westerly across the Atlantic, it’s not too hard to recall also the wildfires currently raging through the Pacific Southwest. Yet again, it’s a really good time to have a national discussion about nationwide disaster insurance, which we believe would make life a lot better for individuals impacted by these kinds of situations in every part of our nation — spreading the risk and better protecting Americans.
When natural disasters strike, concern about the health, safety and welfare of loved ones is paramount. It should be the first priority. But a close second should be the financial health and welfare when it comes to recovering from such a disaster. According to preliminary estimates, Hurricane Harvey may inflict as much as $30 billion in damages on homeowners. But only 40 percent of that may be covered by insurance — and of that, the federal government will bear the biggest liability.
When contemplating solutions to this problem, thinking only about hurricanes fails to grasp the bigger issue. In each corner of this country, some form of disaster looms: hurricanes, floods, tornadoes, wildfires, earthquakes, etc. Rather than overburdening the homeowners’ insurance system and outpricing homeowners, a nationwide disaster insurance program can take the concept of the existing National Flood Insurance Program, expanding it to protect Americans from a wider array of natural disasters.
This is not the first time we have advocated for a nationwide disaster insurance program to be implemented. The concept has been discussed in Washington, D.C., for years, but with minimal results — which is surprising, given the criticism that the Federal Emergency Management Agency (FEMA) has been subjected to the past decade or more. Although insurance is largely limited by location, natural disasters occur without regard for such boundaries. Hurricanes don’t hit the Florida-Georgia line and stop. When Mount St. Helens blew her stack in 1980, the eruption column rose 80,000 feet into the atmosphere and deposited ash in 11 states. No matter where you live, you can’t escape the possibility that a terrible natural disaster might one day happen to your home or business.
The problem is, current homeowners’ insurance policies are designed to be specific, largely to limit risk. Policies are riddled with lists of exclusions and specifications that could leave you uninsured when you need it most. For example, flood damage is excluded under standard homeowners’ and renters’ insurance policies, and while you can get replacement cost coverage for the structure of your home, only actual cash value coverage is available for possessions. Proponents of natural disaster insurance call for blanket coverage across the nation, meaning that whether you face fire, flood, tornado, earthquake or hurricane — or any other such disaster that comes your way — you will have adequate coverage to salvage your life.
As we’ve noted previously, national disaster insurance would create a much wider pool for risks by encompassing communities across the nation that will not likely face natural disasters every year, and spread around the calendar, not just in one season. Better yet, it’s not a hard idea to implement, since we already have the template. Furthermore, it would dramatically reduce the federal government’s financial responsibility to help rebuild homes and businesses, allowing leaders in Washington, D.C., to use our tax dollars more wisely.
We hope you and your family remain safe from the storm this weekend. With some luck, we’ll be able to return to our normal lives in short order.