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Are insurers prepared to cover damage from Florence? - YouTube
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>> Sreenivasan: THE THREAT OF
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STORMS LIKE FLORENCE, OR HARVEY
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AND MARIA, HAS NOT STOPPED
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PEOPLE FROM BUILDING ALONG THE
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COAST.
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BUT SOME NATIONAL HOME INSURANCE
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COMPANIES HAVE TAKEN PAUSE AND
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HAVE BEEN PULLING OUT OF FLOOD-
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PRONE COASTAL AREAS.
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SOME AREAS ARE TURNING TO
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GOVERNMENT-SUBSIDIZED FLOOD
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INSURANCE PROGRAMS BUT THERE ARE
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NEW CONCERNS EVEN THOSE FUNDS
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WILL NOT MEET INSURANCE DEMANDS
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FROM SUPER-STORMS.
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JOINING ME NOW IS TALIA BUFORD
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WHO REPORTS ON THE ENVIRONMENT
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AND CIVIL AND HUMAN RIGHTS FOR
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"PRO PUBLICA" AND IS ALSO CO-
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HOST OF THE PBS DIGITAL STUDIOS
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CLIMATE CHANGE PROGRAM "HOT
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MESS."
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THANKS FOR JOINING US.
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AS WE THINK ABOUT THE
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REPERCUSSIONS OF WHAT FLORENCE
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IS DOING TO THE CAROLINA
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COASTLINE RIGHT NOW, GIVE US THE
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LAY OF THE LAND OF HOW PEOPLE
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ARE PROTECTED, WHAT KIND OF
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INSURANCE THEY HAVE.
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>> WELL, WE TALKED TO INSURERS
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ALONG THE COAST OF NORTH
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CAROLINA.
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BASICALLY THEY TOLD US THAT MOST
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OF THE BIG INSURERS THAT YOU
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HAVE HEARD OF, THE ONES WITH
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COMMERCIALS AND BIG, YOU KNOW,
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AGENCIES AROUND THE COUNTRY,
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THEY DON'T WRITE EAST OF 95.
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THAT'S KIND OF THE HIGHWAY THAT
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RUNS AND KIND OF DIVIDES--
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>> Sreenivasan: THAT'S A LOT OF
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LAND.
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>> THAT'S A LOT OF LAND!
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IT'S NOT JUST THE OUTER BANKS.
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IT IS COASTAL COMMUNITIES,
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COMMUNITIES THAT JUST TOUCH THE
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WATER.
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AND THEY SAY THEY ARE NOT ABLE
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USUALLY TO GET SOME OF THESE
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BIGGER INSURERS TO INSURE THEM
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AGAINST WIND STORMS LIKE
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HURRICANES AND TROPICAL STORMS.
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>> Sreenivasan: THERE'S THE
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NATIONAL FLOOD INSURANCE PROGRAM
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THAT PEOPLE ARE SOMEWHAT
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FAMILIAR WITH, WHERE IF PRIVATE
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INSURANCE DOESN'T PAY, YOU HAVE
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TO HAVE IT ANYWAY IF YOU'RE
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GOING TO PUT A HOUSE ON THE
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COAST.
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WHAT YOU'RE LOOKING AT, THERE'S
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EVEN A BIGGER GAP AND STATES ARE
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FILLING THAT GAP.
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WHAT KIND OF PROGRAMS, WHAT KIND
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OF PLANS ARE THOSE?
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>> RIGHT, SO THESE PLANS ARE
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KIND OF STATE VERSIONS OF THE
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NATIONAL FLOOD INSURANCE
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PROGRAM, BUT INSTEAD OF COVERING
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FLOOD, THEY COVER WIND.
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AND THEY WERE KIND OF CREATED
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DURING THE 60s AND AFTERWARD
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TO INOCULATE CITIES FROM BLIGHT
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AND TO ALSO GIVE PEOPLE WHO LIVE
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ON THE COAST A CHANCE TO GET
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REASONABLE INSURANCE.
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SO IT'S KIND OF A WAY JUST TO
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MAKE SURE THAT IF YOU LIVE ON
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THE COAST, YOU HAVE A PLACE TO
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GET INSURANCE, EVEN IF THE
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PRIVATE COMPANIES WON'T COME OUT
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AND INSURE YOU.
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>> Sreenivasan: THAT'S
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SUPPOSED TO BE THE FREE MARKET
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AT WORK, RIGHT?
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IT'S SUPPOSED TO BE IF THE PRICE
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IS TOO HIGH FOR ME TO INSURE
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THIS PROPERTY, THEN MAYBE I
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DON'T BUILD THE PROPERTY.
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>> SURE.
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AND THAT'S ONE OF THE THINGS OUR
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STORY SAYS.
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IT'S KIND OF MUTING THE SIGNALS
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THAT WE WOULD NORMALLY GET FROM
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THE FREE MARKET.
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I THINK THERE IS AN ARGUMENT,
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YOU KNOW, THAT THERE ARE PEOPLE
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THERE WHO HAVE BEEN THERE FOR
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DECADES AND GENERATIONS AND THEY
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SHOULD BE ABLE TO GET INSURANCE,
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SURE.
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BUT IT ALSO MEANS THAT MAYBE WE
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SHOULD START CONSIDERING OTHER
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OPPORTUNITIES TO MOVE THEM AWAY
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FROM THE COAST OR TO KIND OF NOT
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AT LEAST ENCOURAGE MORE
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DEVELOPMENT IN THAT AREA.
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>> Sreenivasan: I CAN TOTALLY
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UNDERSTAND SIX GENERATIONS OF
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FAMILY, BUT YOU ALSO SEE A LOT
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OF NEW BUILDING THAT IS GOING IN
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RIGHT NOW, AND THOSE ARE NOT
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PEOPLE WHO HAVE NOT BEEN THERE
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SIX GENERATIONS.
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IT'S COASTAL PROPERTY, AND I'M
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ASSUMING IT'S WORTH A TON OF
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MONEY FOR REAL ESTATE
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DEVELOPERS.
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>> ABSOLUTELY.
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IT'S WORTH A LOT OF MONEY FOR
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THE STATE OF NORTH CAROLINA,
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TOO.
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YOU WOULDN'T WANT TO STOP
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DEVELOPMENT ON A PLACE THAT IS
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BRINGING THOUSANDS AND THOUSANDS
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OF PEOPLE TO YOUR STATE EVERY
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SUMMER.
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THE OUTER BANKS IS A HUGE
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VACATION MARKET AND YOU
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DON'T WANT PEOPLE TO STOP COMING
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THERE BECAUSE THEY DON'T HAVE
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SOME OF THE AMENITIES.
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>> Sreenivasan: THIS IS IN THE
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WAKE OF HARVEY, WHERE WE SAW
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DEVASTATING LOSSES, HUGE AMOUNTS
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OF MONEY THAT WERE BEING SPENT,
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AND A LOT OF THIS WAS UNINSURED
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LOSSES.
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WHAT DO THE CAROLINAS, WHAT DO
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THESE DIFFERENT STATE PLANS--
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WHETHER IT'S NEW YORK OR OTHER
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PLACES-- HAVE IN STORE?
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AND CAN THEY DEAL WITH A BIG
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SUPERSTORM OR ARE THEY GOING TO
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BOUNCE A CHECK?
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>> SURE.
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WHAT WE LOOKED AT-- WE LOOKED AT
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NORTH CAROLINA SPECIFICALLY, AND
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IT HAPPENED TO BE THAT FLORENCE
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MADE IT A LOT MORE TIMELY.
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BUT FOR NORTH CAROLINA,
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SPECIFICALLY, THEIR PLAN HAS
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ABOUT $3-BILLION THEY CAN PULL
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FROM AND THAT'S WITH
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REINSURANCE, THAT'S WITH THEIR
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OWN RESERVES, AND THEN THAT'S
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ALSO WITH A $1 BILLION
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ASSESSMENT THEY CAN PUT ON ALL
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OTHER COMPANIES.
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THE THING THAT MAKES NORTH
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CAROLINA INTERESTING IS THEY
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ALSO HAVE A PROVISION THAT
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ALLOWS THEM TO BASICALLY BILL
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EVERY INSURER IN THE STATE OR
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EVERY PERSON WHO GETS INSURANCE
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IN THE STATE, PROPERTY INSURANCE
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IN THE STATE, TO PAY OFF IF THEY
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RUN A DEFICIT.
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SO, IF--
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>> Sreenivasan: BASICALLY,
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TAXPAYERS IN THE REST OF THE
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STATE ARE GOING TO FOOT THE BILL
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FOR WHATEVER HAPPENS ON THE
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COAST, EVEN THOUGH THEY DON'T
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HAVE THE BEACHFRONT PROPERTY.
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>> YEAH, PRETTY MUCH.
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>> Sreenivasan: AND THIS IS
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ALSO-- YOU KNOW, IT'S NOT IN A
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VACUUM.
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THIS IS IN A LEGISLATURE THAT
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HAS ACTIVELY DENIED CLIMATE
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SCIENCE, OR AT LEAST WANTS TO
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INCLUDE OTHER THINGS BESIDES
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CLIMATE SCIENCE THAT SAYS THE
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SEA LEVEL IS RISING.
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THIS IS GOING TO BE A PROBLEM
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THAT GETS WORSE, RIGHT?
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>> RIGHT, RIGHT.
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AND, I MEAN, CLIMATE SCIENTISTS
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ARE SAYING THAT THE KIND OF
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STORMS THAT WE'RE SEEING-- THE
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HARVEYS, THE FLORENCES, THE
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MARIAS-- THEY ARE GOING TO BE
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MORE COMMON.
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WE'RE GOING TO SEE THESE
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STRONGER STORMS DEVELOPING MORE
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QUICKLY.
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WE'RE GOING TO SEE THEM ACTING
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IN WAYS, YOU KNOW, WE HAVEN'T
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NORMALLY SEEN THEM, YOU KNOW,
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KIND OF STANDING OVER STATES FOR
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DAYS OR WEEKS AT A TIME,
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POSSIBLY.
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SO, I MEAN, YOU'RE GOING TO SEE
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A LOT OF DIFFERENT CHANGES FROM
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HURRICANES, AND A LOT OF THE
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STATES JUST AREN'T PREPARED FOR
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IT.
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>> Sreenivasan: ALL RIGHT,
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TALIA BUFORD FROM PRO PUBLICA,
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THANKS SO MUCH FOR JOINING US.
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>> THANK YOU.
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