Since that first moment when man discovered he could gain sustenance from the sea, life at the shoreline has been a constant battle between cost and benefit. Fishing villages survived on the ocean's bounty but the stormy oceans often took back what they gave, and then some.
A different version of man versus ocean is playing out today. For many of us, a home on or near the beach is a dream scenario. But talk to some who have lived the dream since before Hurricane Katrina's far-reaching effects,
Insurance premiums for our condo in Pawleys Island have doubled over three years, and we are 3/4 of a mile from the beach.
and they see life on the beach as a developing nightmare. A few east coasters are watching their homes literally fall into the sea from eroding beaches. But for others whose homes may be safe from erosion, nevertheless the tidal wave of insurance cost increases has reached disastrous proportions.
The simplest outline is this: The damage from Katrina cost insurance companies many billions of dollars, and in many coastal states, such as South Carolina, firms like AllState and State Farm have simply stopped writing policies. Of course, nature abhors a vacuum, especially when there is money to be made, and other insurance companies have stepped in, but their premiums to homeowners have doubled and tripled in many cases. In my own situation, flood and homeowner's insurance premiums for our condo in Pawleys Island, SC, about ¾ of a mile from the ocean as the crow flies, have roughly doubled. Out on the Pawley's Island beach, totally exposed to the Atlantic Ocean, the numbers are even higher. I read the real estate pages when I am in town, and I note that since Katrina, the numbers of homes listed for sale on the beach have increased significantly and the prices, while still in the low millions, have dropped an average of 25% over the last three years.
Of course, people with homes on or near the beach are up in arms about their cost increases and are turning to government for help. They aren't finding much. South Carolina lawmakers, for example, passed legislation in 2007 that stopped well short of any bailouts, instead providing tax credits and tax-beneficial savings accounts to pay for insurance and repairs when needed. The legislators understood clearly that taxpayers in upstate Greenville and Columbia would not subsidize those in Myrtle Beach and Hilton Head.
That sentiment is unlikely to change in the coming years, and those who feel the need to be close to the ocean should proceed accordingly. You could very well turn out to be your own insurer of choice, like it or not.
For an interesting point of view on the coastal insurance issue, albeit from the point of view of the insurance industry, see an
op-ed in today's Hartford Courant by Frank Nutter, a trade association executive.
Residents in the upscale, low country, oceanside community of DeBordieu in Georgetown, SC, have seen their insurance rates skyrocket over the last few years.
