The Coalition of the Swilling

"For example, Harris County, Texas, has one of the highest rates of repetitive flooding in the nation and yet only a quarter of homeowners have flood coverage."

That's just stupid.

"Moskau, a well-to-do real estate appraiser, thought he had taken every precaution: He had the maximum federal flood insurance of $250,000. But when the government issued that check, it was issued in two names: Moskau's and his bank's. His bank applied the check to his $600,000 mortgage, leaving him with an outstanding note of $350,000 and no money for repairs."

That's criminal.

That's criminal.

And that has been my point (and Rob's) through this whole thing. When well heeled fellows 'in the know' get screwed, what exactly is "everyman" supposed to do when

"Behind the sign he hung from his porch is a story all-too-common in this once-posh neighborhood of pummeled homes: Even New Orleans' affluent homeowners, who thought they had done the right thing by properly insuring their investment, are finding that technicalities are keeping them from securing enough from their insurers to rebuild."

I've always said you could get better odds at any reputable bookie. And the bookies actually, y'know, pay off...

A guy in my office is one of the ones that Allstate just cancelled.

Bastards.

I should point out that this was inevitable. When you build a lot of expensive homes in harms way (e.g., in Hurricane Alley, or in a flood plain), and the insurance companies pay out major damages as a result, sooner or later the insurance companies will start taking a loss. I can't say that those companies are at a make-or-break point now, but ultimately, insurance companies exist to make money. That profit is based on an element of risk, and clearly they are going no further, even if they screw customers of long standing.

Now, I think that the process the companies are using is criminal, ethically if not legally. If they aren't covering the damages, they should refund some or all of those premiums collected over the years. They won't, of course, but they should. At the very least, they should have given fair notice of their intent to cancel and/or reduce payments. Not that people would have actually listened, but the companies could have been more forthright about it. No one expected almost complete and immediate abandonment.

Frankly, people need to accept more responsibility for their decisions on where to build their homes. Local governments sure won't do it -- it kills their economy to restrict development, not to mention reduces their tax base -- so they let the insurance companies do it for them.

And the bad news is that the insurance companies are going to lose considerable income for a while through reduced premiums. I'm sure that they know this, and it's a factor in their decision making. Their ability to cover other disasters may be reduced for a time. And certainly other home owners will see their premiums skyrocket (I think I read that this is already happening).

I'm hoping that Congress does not step in, like with the flood insurance program*. We do not need another Federal bail out of bad decision making.

Let's face it, folks, we don't need expensive developments in high risk areas. If someone wants to build a home in a hurricane zone, let them, but it should be designed with hurricanes and flooding in mind; those won't be so architecturally pleasing. I've seen way too many developments built in flood plains, with the full knowledge and approval of the local government. Hurricanes are different, but only in scope.

Having grown on the west coast, with the Puget Sound right there, I feel for the folks who love living near the water. But river banks and beaches are disaster magnets. Sooner or later, we need to draw a line. I'm not sure where that line will go, but I can see people starting to work out that answer.

So, feel free to throw rocks at me -- I merely said it first.

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*: BTW, the flood insurance program doesn't provide for 100% coverage. I've seen this before in other flooding. The FIP really amounts a partial subsidizing of bad development policies, and does not cover the home owner completely.