Government Causing High Flood Insurance
By Seth Grossman, Political Columnist
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??????? Last week, more than 50 angry homeowners from Ventnor, Margate, and Longport in Atlantic County demanded government action to fix their insurance “nightmare”.?? For the past year, State Farm and other insurance companies have refused to issue or renew homeowner policies on any barrier island, or on any home near the water in New Jersey.
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?????? Atlantic County Assembly Republican Assemblymen John Amodeo and Vince Polistina hosted a meeting in Margate to discuss the issue.?? At first, they correctly observed that legislation is not the answer, and that “New Jersey is already over regulated”.? But two hours later, they agreed with the crowd, and said “new laws might be needed”.
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??????? Amodeo and Polistina had it right the first time.?? This insurance “nightmare”, like almost every serious problem in New Jersey today, was created by government.?? The obvious solution is to demand that government do less, not more.
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??????? But most people today don’t see it that way.?? And smart politicians give people what they want.?? In so doing, these smart politicians create laws and programs that give them and their supporters more money, power, and control.?? This is why they keep getting re-elected, even when they make things worse.
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??????? Government started this insurance mess some 19 years ago.?? In 1989, Hurricane Hugo devastated big chunks of North and South Carolina.?? In 1992, Hurricane Andrew did the same in Florida. Democrats in Congress and Bill Clinton, and Republicans like President George Bush, Sr. did everything they could to buy votes in these “swing” states.?? And with the Cold War over, high paid Civil Defense officials needed to keep their jobs by doing something besides stock fallout shelters with survival crackers.?? The result was a perfect storm of government waste and corruption called “Federal Emergency Management Administration” (FEMA).
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??????? Before the Bush – Clinton era of FEMA, most rich people built modest cottages by the beach.?? It was too risky to build luxury houses there.?? Bad storms often destroyed entire shore communities.?? Flood insurance was too expensive, and often unavailable.
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??????? But the new Bush-Clinton FEMA brought cheap flood insurance for luxury homes on the beach.?? Modest beachfront cottages near Myrtle Beach were torn down and replaced with mansions.?? There was an upscale building boom on barrier islands from Maine to Texas.
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??????? I am no expert on insurance rates.?? But when I lived in Atlantic City, it seemed to me that my modest house on high ground far from the beach was carrying the load for high risk waterfront mansions.?? That is why I and many like me dropped our flood policies.
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??????? Then came Hurricane Katrina in 2005.?? The disaster in Mississippi and Alabama was caused by nature.?? The disaster in New Orleans was mostly government-made.?? Corrupt state, county, and local officials used levy and seawall repair money to buy votes instead.
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??????? Many people who lost their homes in Katrina did not have flood insurance.?? But they filed flood damage claims on their homeowners’ policies with State Farm, Allstate, etc. anyway.?? Although these companies did not owe a dime on flood claims, they still paid out billions.
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??????? Why??? These insurance companies were bullied and coerced by politician-attorneys general, insurance commissioners, and “compassionate” judges and juries.?? They ruled that the insurance companies acted in “bad faith” when they correctly claimed that flood damage was not covered by their policies.?? They decided that houses that floated off their foundations were really first completely destroyed by wind, and thereby covered by homeowners policies.?
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??????? I bet State Farm will not insure any homes by the shore in New Jersey because they think our New Jersey courts and politicians will do the same thing.
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??????? We should not force insurance companies to give cheap policies to high-risk luxury beach homes.?? We should not tolerate “compassionate” judges who ignore the plain language of insurance contracts, so someone can collect a benefit they never paid for.?? This is what makes insurance so expensive for the rest of us.
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??????? But we are moving in the opposite direction.?? State Farm and Allstate insurance companies are spending big money lobbying for a federal law that would force every homeowner in the country to pay more for insurance, so luxury beachfronts in Florida (and other coastal areas) pay less.
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??????? Read their propaganda at www.protectingamerica.org.?
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??????? Both Democrat Obama and Republican McCain pledged support for this.?? They both need to carry Florida in November.
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For more information, visit www.libertyandprosperity.org or contact Somers Point attorney Seth Grossman at grossman@snip.net or 609-927-7333.??? Seth Grossman hosts a two way talk radio program every Saturday from 8am – 9am on WVLT Vineland, 92.1 FM.