While a calm hurricane season, such as the once that just occurred has benefits, i.e. helping maintain homeowner’s insurance rates, it’s a risk to get too relaxed. The Daytona Beach News-Journal appropriately urges homeowners to avoid complacency.
The fact that meteorologists predicted an above average number of hurricanes – yes, not only more than we had but more than we usually have – underscores how imprecise predictions are. The danger then is that homeowners, especially ones along the coast must continue to wary and vigilant.
Being lulled into a fall sense of security can wreak as much damage as the storm itself.
Property damage from natural disasters is sadly not unusual. Hurricanes, tornadoes, flood waters, fires, mudslides and earthquakes can all wreak havoc on homes. But enter the world of science! Maybe the inevitable damage is actually avoidable.
Researchers from Johns Hopkins University spent many months to see if they could build a better mousetrap – or in this case, a better home. Two homes, one of a bare steel skeleton and another with exterior sheathing and nonstructural elements were subjected to more than 130 shake tests. The results were excellent!
Then, the team began its most powerful test: simulating a 1994 earthquake that rocked Los Angeles, killing 60 people and causing $13 billion in damage.
How will this research effect property in the future? Insurance companies will take note. Safer buildings could be the wave of the future – or they could be all about the science and not the residence.
The Tampa Bay Times, formerly the St. Petersburg Times, authored a well-thought out editorial column addressing issues behind the debt-ridden flood insurance program. Last year, the Biggert-Waters Act was passed. The Act was created to acknowledge and focus on flood insurance and the subsidies that were in place for properties in the ‘70s, the Act may have other effects that will impact real estate in general. The Times suggests that coastal homes will be dramatically devalued and also suggests that this is a devastating way to address the issue.
Pinellas County is the national leader with more than 50,000 policies that are subsidized. Miami-Dade is right behind with more than 47,000. Not every one of these homes is the domain of the super-wealthy. The removal of the subsidies will hurt many people who have own modest homes that are statistically in a flood zone.
The Times urges congress to consider a reasonable policy, and to rethink the Biggert-Waters Act, which, it says “threatens to destroy Florida’s real estate market.”
The New York Department of Financial Services just proposed a new rule that impacts force placed insurers. The rule prohibits forced place insurers from placing coverage on a property that is served by an affiliated bank. Why is this proposal on the table?
A profit-sharing plan seems to be the reason and this proposal will forbid carriers from paying commission on the force-placed insurance, thus limiting the appearance of a “kickback culture,” according to the Superintendent of the Department. The proposal suggested other provisions including barring payment of contingent commissions based on underwriting profitability or loss ratios.
If this proposal becomes law in NY, will it set a precedent in other states? Will it really help homeowners? Read more.
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