If you have tried to purchase a vacation home on Galveston Island in recent years, you may have discovered the crazy new insurance rules that are changing the real estate game. If the property you are purchasing did not survive Ike undamaged, you may find that your insurance bill rivals the cost of your mortgage.
That’s because most of the island is uninsurable on the private market. It turns out that insurance companies are too stupid to understand what every Tea Partier instinctively knows – that global warming is a hoax. Thanks to a century of rising sea levels behind us and accelerating sea level rise ahead of us, insurance rates even with substantial intervention by the State of Texas are skyrocketing.
Portions of Galveston unprotected by the seawall were already projected to be underwater in coming decades based on estimates issued a few years ago. News this week about the Antarctic ice sheet is going to further darken the picture. You may not believe in climate change, but if you believe in homeowners insurance and you want to own coastal property, a warming planet is already affecting your bank account and those impacts are going to grow more severe very soon.
The State of Texas effectively nationalized homeowners insurance for coastal residents several years ago under the umbrella of the old Texas Windstorm Insurance Association. Socialism appears to be bad for everyone except those who want to own vacation homes. That agency is functionally insolvent. Instead of funding claims through premiums and investments, it must fund claims through bond issues. The state-run “insurance” that coastal residents depend on is funded collectively and backed by the state. Private insurers will not deliver coverage at anything approaching an affordable level.
How much longer will the state’s taxpayers and insurance holders continue to subsidize coastal development that ignores climate change and rising sea levels? The science on the question is unsettled.