Hurricane Andrew, which slammed into South Florida on Aug. 24, 1992, was the second costliest storm in modern U.S. history. Here in Miami-Dade County, which took the monstrous brunt of Andrew’s Category 5 winds, we’re observing the 20th anniversary by battening down the hatches for a new cyclone, Tropical Storm Isaac – which could be a hurricane when it passes near Tampa and the Republican National Convention. That’s a coincidental reminder that many Floridians aren’t just cursing Isaac as they put up their shutters this weekend. They’re also fuming about Governor Rick Scott and their state-run property insurance corporation, Citizens, both of whom are widely accused of trying to throw Sunshine State residents into a financial tempest.
That controversy, laid out in a Miami Herald/Tampa Bay Times series this month, has a lot of recession-racked Floridians wondering if they can afford to stay on the peninsula. Scott, a Tea Party Republican who disdains just about everything in the public sector, seems especially contemptuous of Citizens, established in 2002 largely to give Floridians access to affordable hurricane insurance in the wake of Andrew. Today it’s the state’s largest property insurer, but Scott insists it’s too big, and he and company honchos are on a campaign to jettison homeowners from Citizens coverage and into the private sector. This despite the prospect that residents’ windstorm premiums, which alone can top $4,000 a year for a $200,000 home in Miami, may double or triple – provided they can even find a private carrier who wants to write windstorm policies in Florida – possibly leaving many unable to afford the coverage that their mortgages require.
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Granted, it’s not ideal to rely on a state-backed insurer as much as Florida leans on Citizens, whose bosses argue that its premiums are too low and its exposure too big to weather the next Andrew. Still, a hurricane hasn’t hit the state since 2005. And Floridians might not be so irked at Citizens’ stepped-up efforts to cancel policies if it weren’t for another of Scott’s crusades: his dismantling of much of the state’s growth management apparatus, which lawmakers and civic groups designed in part to keep the peninsula’s burgeoning population and reckless development from making Florida even more exposed to the financial wreckage of hurricanes – and the insurance premium spikes that result from it. Scott, for example, has abolished the Department of Community Affairs, which helped limit chaotic sprawl and kept developers from encroaching on the Everglades.
The problem is hardly unique to Florida, as Hurricane Katrina, U.S. history’s costliest storm, so painfully reminded us in 2005. But the GOP should ponder it next week as Isaac roars by the Tampa convention. As the U.S. population keeps concentrating in areas prone to hurricanes, floods, earthquakes, wildfires and other disasters – and as factors like global warming, no matter how hard some try to ignore its presence, exacerbate those phenomena – both political parties are going to have think harder about how to better minimize the risks and absorb the costs. Low-lying coastal areas, for example, “were never meant to house as many people as they do today,” says Tim Chapin, professor of urban and regional planning at Florida State University in Tallahassee. “More rampant development will absolutely put more people at physical and financial risk.”
So let’s hope Isaac reminds the pols in Tampa – and the Democrats at their convention the following week in Charlotte, N.C., another hurricane-vulnerable state – about legislation that’s been lingering in Washington for years: a national catastrophe fund system. The “CAT Fund” would keep premiums more reasonable by pooling money from about 20 disaster-prone states and using it to help governments and insurance companies handle the costs of large-scale catastrophes like Katrina. Says Adm. James Loy, a former Coast Guard commandant and co-chair of ProtectingAmerica.org, which lobbies for better national emergency preparedness, “I’d like to think now that we’re gaining traction in Washington for this notion of a national backstop.”
The CAT Fund wouldn’t be a taxpayer-funded backstop – which matters in this age of deficit doom, when government disaster relief is strained at best. Instead, private insurance companies would contribute a portion of their policy holders’ premiums to state CAT Funds; to be eligible for national relief, the states would then contribute a portion of their money to a national CAT Fund administered by the Treasury Department. The key, says Loy, is having “three tiers accruing money over time – insurers, state funds and the national fund – sharing the burden and not relying on federal bailouts.” The fund would also support first responders, encourage smarter building codes and growth management at the state and local level and promote public education, “making it more evident to homeowners what they’re signing up for when they choose to buy a house in one of these areas,” says Loy.
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Perhaps most important, Loy adds, a national CAT Fund would lure large private insurers – which have all but abandoned property and windstorm markets like Florida – back to those areas. As a result, experts like Chapin agree that Washington has to put ideas like the CAT Fund on its radar. “We’ve got to get away from the way we depend on the federal government to save everyone’s bacon in a disaster,” says Chapin, though he and others think that may inevitably require higher taxes for residents in catastrophe-prone zones. “It gives us the illusion that there’s no risk to overdeveloping these areas, that every time a disaster hits we can just build everything back the way we’ve done before.”
Chapin insists, however, that Florida, to its credit, has done a better job than most coastal states in the past 20 years improving building codes and infrastructure like drainage. Which makes Scott’s assault on smart growth management all the more distressing — all the more a reminder of how much we haven’t learned since Andrew.