Environmental Engineering Reference
In-Depth Information
as it did in 1992. Private insurers say they can no longer handle losses
on the scale of Hurricane Katrina, and such calamities are likely to
increase in frequency as global warming becomes more severe, as it
certainly will. We are in a new era of catastrophic losses from natural
disasters.
About half of the $100 billion of damage from Katrina was privately
insured. States and the federal government are being expected to be
insurers of last resort and to subsidize the cost of insurance to property
owners. Katrina helped put the federal fl ood insurance program $23
billion in the red and prompted federal relief spending of more than $100
billion. A spokesman for Allstate said, “Our view is that there are some
events that have the potential to be so large as to exceed the capabilities
of the insurance industry, as well as the funding and fi nancing capability
of individual states. Those are events that have the potential to be $100
billion. These events are so enormous, no entity has the ability to manage
it.”
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A spokesperson for Citizens Property Insurance, the state-chartered
insurance corporation in Florida that is the state's largest insurer, said,
“What everybody knows is that no one could charge enough in the high-
risk areas of Florida to cover the potential damage in a one-in-a-hundred
year storm. We just can't do it.”
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But using governments as backstop insurers encourages migration to
the coast and makes potential hurricane catastrophes more expensive.
To what extent should individuals be held responsible for making sound,
informed decisions about where to live? Those who live inland in vulner-
able states are not happy about having to pay some of the cost of insur-
ance for coastal dwellers. To what extent are Americans their brother's
keeper where property insurance is concerned?
Many people who live in fl ood-prone areas are eligible for low-cost
federal fl ood insurance. FEMA is responsible for the maps that mandate
which Americans require fl ood insurance, and these maps require fre-
quent updating as the climate changes and existing fl ood protection is
no longer adequate. An example is our nation's capital. Washington,
D.C., was built on swampland more than 200 years ago. When the
Army Corps of Engineers recently reexamined America's outdated fl ood
control components, it found that levees built into the landscape to
protect historic landmarks, world-renowned museums, and federal
buildings in Washington were likely to fail in the next big fl ood. If a
major storm hit, parts of Washington would be under 10 feet of water,
causing $200 million in damage.
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Flood maps were redrawn, causing
some homeowners to purchase fl ood insurance for the fi rst time.
