One of the central themes when it comes to discussing the high cost of property insurance in catastrophe-prone locations is that of whether people who live in harm’s way should bear the financial burden of the risk they face…or is covering such risk seen as a social need sufficient to justify subsidies paid by folks in safer locations, either through insurance rate-setting, or via a government construct.
Interestingly, it seems that a coalition of consumer and environmental entities are questioning the wisdom of enabling folks to live in environmentally sensitive areas…which tend to be highly correlated with “riskiest to insure.”
Seen in Insurance Journal:
An unusual alliance of insurance and environmental groups is urging lawmakers to focus on policies that encourage property mitigation and environmental protection in catastrophe-prone areas, rather than expanding the government’s flood insurance or “bailing out” Florida’s catastrophe plan. [...]
Americans for Smart Natural Catastrophe Policy said it “strongly opposes proposals that encourage people to build homes in hurricane-prone, environmentally-sensitive areas by creating new programs to directly or indirectly subsidize their homeowner’s insurance.” The group cited proposal to make wind coverage available in the federal flood insurance program as the type of public policy it opposes.