No. of Recommendations: 26
On September 11, 1960, Hurricane Donna makes landfall on Long Island as a Category 2 hurricane. While it cause little damage elsewhere, a stretch of cost in the "Manhattan Beach" neighborhood of Brooklyn, N.Y. was mauled as it busted up a concrete and stone causeway, known as "The Esplenade" (which connected Manhattan Beach and Brighton Beach along the shore) and tossed large portions of the slabs of concrete into the gardens of the high end houses along the shore and filled their first floors with sand and debris. The rest of the neighborhood was flooded and generally trashed.
As a youth, I used to swim the length of the mile-long remnant of the walkway or simply "mountain climb" from one beach to the other, wondering why it had never been cleared (I figure the people living alopng it felt this would discourage people walking behind their houses).
Anyhow, during the 1990's a number of Brooklyn's Russian oligarchs aquired the properties, bulldozed the rubble away and used it to build a burm, preventing street access to the entire area. This allowed them to have unchallenged waterfront views across thdeir now-unprotected laws.
None of the above should have been a secret from any insurance companies who were involved in the first event, yet many were shocked by the even higher level of devistation caused to these houses by hurrican Sandy in 2012, which while only 50 years after the previous event, was advertised a a "once in 500 year storm").
So, doing back of the envelope scribbling (using a vast set of two data points, but figuring global warming will not improve things), that should mean that insurance companies should charge 1/50 of the replacement cost of the property each year just ot break even. That would mean that, for a 7.5 million buck home, the insurance to cover this would run about $150,000 per year (or $12,500 per month). Certainly a lot just to pay for a "million dollar view", but the option would be to simply move somewhere safer to live.
Could they afford to live without insurance if they lost their house? Frankly, they would certainly be "peeved", but they generally have the resources to recover with more bruising to their pride than to their standard of living.
There are people living in Palm Beach, Fire Island, Hilton Head and their ilk who cry about this first-world problem of having to actually foot the proportional bill for living in a posh location. Most of them have the means to live nearly anywhere they decide suits them, but feel it should be the government's responsibility to provide "affordable" insurance so that they can continue to live economically in their chosen locales.
I have a high-deductable version of medigap insurance on my Medicare (Type G) as I figure I can afford to pay for any expeenses below catastrophic. I frequently go on expensive vacations with just a thin layer of insurance and take on the rest of the risk (other than also having an annual air-ambulance contract, again to cover the catastrofic tail of risk) as I figure, if I can afford to pay for a trip, I have already decided to "burn the money" and can afford to lose it (though, of course, I would be peeved).
I feel far more sympathy for those who get caught in floods or tornedos because they live in large flat rural areas where they farm than for those who have invested in beach-front property in areas set upon by hurricanes because of the view.
Jeff
