A few months ago, I opined that the national flood insurance program should be terminated, and later cited cases where multiple claims had been filed on the same property for many years. Some approved; others thought I was being far too harsh.
It seems that others are adding up the financial burden to insurers, and coming to the same conclusions.
After a destructive wildfire swept from Calabasas to Malibu in 1993, the head of the Santa Monica Mountains Conservancy stood on a mountaintop on live TV and made a radical proposal.
He called for a “three-strikes” rule to limit the number of times recovery funds could be spent to help rebuild a home destroyed by wildfire.
Today, Joseph T. Edmiston is still wincing from the blowback. But he hasn’t backed down. Just the opposite.
“I think two strikes is enough and they ought to be bought out,” Edmiston said, after spending three days coordinating the conservancy’s crews on the Skirball, Rye and Creek fires.
He’s not alone. With the frequency and cost of catastrophic wildfires climbing in California, the idea of compensating property owners to not rebuild — or using economic pressure to discourage them from building in the first place — is gaining supporters among those searching for ways to cut wildfire losses. The state has seen its most destructive year of wildfires in its history, with more than 15,000 structures damaged or destroyed and more than 45 people killed. Researchers warn that 2017 is a sign of what’s to come as the effects of a warming climate and unchecked wildlands development converge.
“I think what’s next is that every mayor, every town council and city planning board has to take this really seriously,” said Char Miller, professor of environmental analysis at Pomona College. “I would tell a zoning commission in Claremont or wherever, ‘Buy up the land before it gets built. And if a fire comes through, buy up the land so it won’t burn again.’ ”
The question of rebuilding is emotionally and politically fraught. Proximity to nature, beautiful views and remoteness draw people to the wildlands where builders have obtained permits to place houses in areas with high susceptibility to fire. Some of the neighborhoods that burned this year had experienced fire before when there was less development. Houses rebuilt there will soon be at risk again from a fire cycle that experts say is shortening from decades to only years.
There's more at the link.
I think the conclusion is inescapable. The national flood insurance program is subsidized by taxpayers. Fire insurance isn't, but it's subsidized by the 'pool' of insured clients of the insurance companies. Those in fire-prone areas, who are more likely to lodge claims, are being subsidized by the premiums of those in less risky areas, who are less likely to claim on their policies. Either way, the cost burden is becoming unsupportable.
I think that a "three claims and you're out" rule for damage-prone property is more than reasonable. You get one final payout to settle your mortgage (you can keep the change, if any): but you lose your land, and no private owner can ever build there again.
What say you, readers?
Peter
28 comments:
Absolutely agree!
After one of our really bad floods, some woman wrote a prolonged whine in our 'alternative' paper. Her complaint: Insurance had paid for the loss of her house but refused to insure the new house she was building on the same low-lying, flood-prone site.
25 years ago, while working for a county government, I was also the Nat'l Flood Insurance Program administrator for said county. We had three rivers (Missouri, Bourbeuse, and Meramec (and now you can look up which county)). After the Great Flood of '93, the NFIP refused to re-issue coverage to homes in flood-prone areas after two successive previous payouts. I always assumed that was an established policy at the national level.
If it ain't, it oughta be.
I worked with rangers with the Santa Monica Mountains Conservancy for many years. My job was to ensure that they complied with applicable fire codes and to serve as a liaison between them and my agency. They are tired of spending money to maintain brush clearance standards between their properties and neighboring residences. They would also like to acquire additional property at "fire sale" prices.
The reality is that there is no one alive who isn't living on a plot of land that wasn't in the wilderness at one time. Unless they are living on a boat. These calls for abandoning the interface is part of a much larger agenda.
What did they do a hundred years-ago? Your house burnt, flooded, hurricane, or tornado...you bore the cost yourself. Makes sense to me.
Possibly, fires are increasing due to overgrowth. Actually +using+ a forest tends to do wonders. Not current on the US specifics of this.
Take care.
I don't think anybody should lose the property unless they want to. I do think they should be in the same situation the first 2 commenters mention: no further subsidized insurance available for structures on this property.
Let the market handle it. Let premiums truly reflect the risk. The cost of insurance in the most severe risk areas will then be in balance. Maybe the granola eaters will learn why there used to be a thing called a firebrake around a house...and use fire resistant materials for cladding those houses.
For goodness sake keep the dang government out of it...especially since this is California we are talking about.
California burns, shakes and slides. It's what it does. If you own the land I'm loathe to tell you what you can do with it unless it interferes with others. If the insurance company decides that your wood structure isn't an acceptable risk then so be it. Seems like in this day and age one could build a fairly fire resistant structure without too much extra expense. Concrete, ceramics, heat ablative materials for the exterior. Shutters and heat resistant glass. A system to drench the house and surrounding area with water or foam. I'm not overly familiar with wildland fires aside from fighting a handful of minor brush and timber fires in a rural setting but that would seem to be adequate protection in all but the most extreme situations.
Capt. Schmoe has a very good point about a larger agenda at play. Insurance losses and taxpayer bailouts are just a distraction. TPTB, for a variety of reasons and agendas, want people out of rural and even suburban areas and herded into planned high density urban centers. They've really not made much of an effort to conceal that fact.
With respect to fire, if I ran the circus I'd say this:
Let the insurance companies do some research and IF they can set design parameters for structure (I've read about monolithic concrete dome houses) and landscaping, require a rebuild to use approved plans in an approved manner and make agreeing to regular drone inspections part of the next insurance policy.
THEN if you do that, they'll insure a rebuild. Once. If you don't like those parameters, even if your new house was built to existing code, no (or insanely expensive insurance on it. But if you build it and those drones show that you maintained it right and you then lose it in another fire, they'll buy you out.
If they can't come up with design parameters they're willing to put company money on... buy 'em out after the next loss.
But Capt. Shmoe and Anon 11:27 are also right about an agenda. It'd be a terrible thing if somebody started a fire to advance that agenda, wouldn't it? Nah. That'd never happen.
Agree? No.
There is no place on earth that hasn't experienced a natural disaster of some sort, whether it be a fire, flood, earthquake, hurricane, whatever. Eventually we would all be living in un-insurable properties. Get the government out of the insurance business and let the marketplace do it's own evaluation and price setting based on the particular risk.
Forests need to be brushed out and thinned out to avoid (mostly) wild fires. Greenies refuse to understand that.
What happens if previous owner has timed out and sells the land to new owner. Does '3 strikes' start from scratch ? New owner has not (theoretically) used any insurance, so ...
Land costs will go up anyway, from all of the land now lain fallow. What happens to it - public land ?
As stated above, free-market pricing of insurance should take care of it.
Of course the unintended consequence will be an increasing cost of living in "desirable" areas but too bad.
A. Nobody ( CERTAINLY NOT .GOV!!) should be able to claim land I paid for.
2. Whyinthehell is it MY taxes go to rebuild houses placed in stupid places by stupid people? New Orleans hurricanes, New Jersey's beaches, California wildfires, NYC subway after a hurricane? Every one of those are predictable and people who don't plan, should suffer the consequences. NOT MY FAULT and I don't want to pay for their stupidity!
Be careful of what you wish for:
"unchecked wildlands development"
combined with 100+ years of fire suppression and fuel build up.
Not that conspiracy theory is warranted here, but with the large number of conspiracy theories being proven true in the last two years it looks like Agenda 21 in operation here.
Forbidding "wildlands" development due to fire risk, which is a risk due to human intervention in fires, is a handy excuse to constrict populations.
One can look at Washington state in which the courts effectively shut down all building in any non municipal water supplied area by requiring proof that water extracted using the domestic exemption would not reduce senior water rights holders water before the issuance of a building permit.
Now there's a proposal to meter domestic exempt wells, reduce a 5,000 gallon a day allotment to 350 gallons, and eliminate the agricultural, livestock, garden, and lawn allowances that are part of the exemption.
Fire is a tool of the envirofascists, just as water is. Be wary.
Anything with the word "conservancy" is just another ploy, using the proceeds of capitalism to advance a progressive communist ideology. Whether they are polezniye duraki, or fellow travelers, their desire is to lock humans out of the liberty of choosing where to build and live.
Let the market decide; take government compeltely out of the insurance business. "Well then "people" could not afford to live in X!"
Of course they can, if they, by their own efforts and success, can afford it. And if they cannot, it is not my, or the governments business to subsidize them.
The answer to a problem caused by government intervention is, & has never been, more government.
Just for S&Gs, call your insurance agent and price the insurance on your existing car for a 45-year-old married male with children and a 17-year old unmarried male student owning the same car.
The price difference is the difference in assumption of risk between the two drivers, and, yes, even that is subsidized by everyone else who has insurance with that company.
I'm with many of the commenters above: it's my land, I paid for it, within the parameters of statutes and the Constitution I get to do with it what I want. That does not mean, however, that all my "neighbors," however far away they live, should suffer the burden of assuming any part of my risk on structures I build on my land.
Insurance companies aren't stupid, and they have very detailed actuarial and risk tables they use for costing a risk; high risk earns a high premium price. After the 2004 and 2005 hurricane seasons quite a few insurers announced they were leaving the Florida market, and homeowner's insurance from those who remained got considerably more expensive. The company I went with required my house undergo a risk assessment by their inspector to determine how hurricane resistant the house was, and consequently, what my premiums would be. As much as I didn't like the resulting premium, even with a very high score, that process seemed quite reasonable.
The downside to such a blunt approach would be fire prone rural areas having only those houses built by people rich enough to self insure, or at least well off enough to contruct using demonstrated fireproof techniques and materials, or extremely cheap shacks which are disposable.
I will say that there's a huge difference between Fred & Larry's Excellent Insurance Company spreading the cost over its policy holders for writing a policy in a fire (or flood) prone area and the fed dot gov taking money from me by force to insure that property. Fred & Larry may eventually decide the risk is too great and decline to insure; the #$@& government will never do that, just take more money from me by force so it can be "fair."
There is a big difference between government/taxpayer funds and insurance company money. I agree the government should not be subsidizing people living in dangerous areas. Insurance coverage in the private market is a different animal. The entire purpose of insurance is to spread losses around, through premium collection. As long as the underwriters do their job, the cost of fire insurance on one of these houses should reflect the risk of loss. That is a simple business decision. As long as someone can pay the insurance on a house in one of these areas, they should not run into governmental interference. Those houses which are mortgaged will have insurance because the bank will require it. Those which are not mortgaged will either have insurance or the owner will have the cash to rebuild, or not. Government already interferes with private property too much. Keep government out of it.
A lot of this just seems silly to me.
If you are in a flood area build the house above the flood line, I lived in several areas overseas that did just that. If it means a first story that is essentially a concrete storage area with the living area above that, well you got a BIG garage. If the area floods to more than 12 feet or so than this isn't practical, maybe abandon that space.
Wild grass, brush or forest fires (unless you have very big trees close) really shouldn't be an issue, designing a house that will survive an outside fire, given even minimal grounds-keeping to keep the brush back isn't rocket science. A concrete tile roof over a non-flammable substrate, block or brick walls, heat resistant roll-up (pretty much invisibly within the walls) window covers and a more sensible attic ventilation design that doesn't channel the fire onto tinder dry studs and plywood have you 90% of the way there.
An insurance company should be happy with the loss possibility in the above cases and you wouldn't need the government involved.
Keep the government out of the insurance business, and ban government assistance for housing purchases, etc, in high-risk areas. I suppose we could use the insurance companies estimates to establish what we would consider a "high-risk" area, but that's just a thought, it might be silly. Either way, if it's not funded or subsidized by tax dollars, I say "don't tread on me" (so to speak). Now, whether emergency services should be restricted to private-funding in those areas...maybe. One could argue that, otherwise, taxpayers *would* be subsidizing some of the risk...
I live in northern Spain. After a particularly wet winter I claimed for a water damaged ceiling due to filtration. The insurance asked for proof that the cause of the water damage was resolved (at my expense), then paid out for the repair. They also informed me that they wouldn't accept any more claims on that ceiling.
I now monitor the repair I made very frequently!
From Bibliotheca Servare, above: Keep the government out of the insurance business, and ban government assistance for housing purchases, etc, in high-risk areas.
You're halfway there; how about keeping the government out of the housing and mortgage businesses entirely? If one searches the Constitution and amendments no mentions will be found for "housing" or "mortgage" yet we have HUD, Fannie Mae, Freddie Mac, Sallie Mae, FHA and VA loan guarantees, Farm Bureau loans from the Dept of Agriculture, and host of others elsewhere in the federal government.
I say that's nonsense.
Simply declare those at-risk parcels are mandatorily "uninsurable".
You want to buy the land and build there, it's on you, but no bank will ever sign the note, and no insurance company may legally issue a policy to cover it.
Easy peasey, and everybody wins.
Then, you have the county declare that no fire or rescue response to those areas will be forthcoming under any circumstances. (Which is akin to posting a sign at the quicksand pit that no lifeguard is on duty.)
The last thing I want public funds spent for is to buy property so crappy that it's unbuildable, just to protect people from their own stupidity.
I want the morons left free to do stupid things, and win stupid prizes, but I want them to bear the entire financial (and actuarial) burden alone, including damages caused to others when their McMansions wash away, tumble down a hill, etc.
If, OTOH, one of the previously notable lackwits figures out that building a house in a fire zone out of bombproof reinforced concrete gets him his million-dollar vista, and has zero chance of crumbling or sliding or burning down, more power to him. It's no business of government to tell you you're not allowed to enjoy what you've purchased, it's simply their job not to subsidize you when you do it stupidly.
Zoning those properties as uninsurable, therefore unmortgageable, and unserveable for fire and rescue would cost exactly 0 dollars.
The cheapskates will lose them to taxes, and they'll revert back to TPTB for 0 dollars upon default. The brighter ones will build a better mousetrap, or go bankrupt building a house of straw in a fire zone.
None of which breaks my leg nor picks my pocket.
Aesop:
your suggestion plays directly into the playbook of the earth first/socialist/communist types.
The expected progression of .gov mandates against property owners would eventually make it impossible for anyone to live outside the borders of high density city zones. All those single family homes surrounding the L.A. area, for instance? Not dense enough. They will eventually end up condemned, and everyone will be herded into high-rise buildings. Makes controlling the unwashed masses so much easier.
One issue though:
If rebuilding in disaster-prone areas becomes the norm, where will all those displaced individuals go?
If we wind up with hundreds of thousands of people clustered together in limited areas couldn't that turn this whole culture into a mega-urban dystopia?
The above should actually read: "If it becomes the norm to discourage rebuilding in disaster-prone areas..."
I don't know where my mind was at when typing that first sentence.
Will:
You're speaking fluent nonsense.
No one's building is condemned under what I suggested.
I specifically said Let the owners build there.
What's condemned is leaving a bank (and by extension, the FedGov through the FDIC and Fannie Mae/Freddie Mac) on the hook for an unpaid mortgage, or an insurance company liable for paying out settlements repeatedly on no-longer-subsidized insurance policies.
Boo frickin' hoo.
The owners simply bear the brunt of the bill for all construction, and damages.
The obvious answer is that when you're on the hook for something, if you want to keep it, you build it right, at whatever cost, rather than expect everyone else to bail you out for your short-sighted stupidity.
That's called rugged individualism, and it plays into no such earth first/socialist/communist types' playbooks, ever, anywhere.
There's no "progression" of government mandates, rather instead just a single, rational policy, and one that should be the heart of most government activity:
YOYO: You're On Your Own.
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