Try not to fall asleep while we explain Parametric Insurance, which is used in parts of Mexico. Given that Hurricane Patricia just passed through that country, with surprisingly less damage than expected, let’s get a handle on parametric insurance as a possible tool in our Rethink toolbox.
Weather can be unpredictable as we know, with not-so menacing storms causing way more damage than anyone expected; like the South Carolina rainfall of October, 2015. And then some super-gnarly storms come ashore and it is not as bad as predicted, like Hurricane Patricia in Mexico recently.
But with parametric insurance, a certain event triggers the payout from the insurers, instead of a lengthy assessment of damage afterwards. For hurricanes, the event is typically barometric pressure. If the pressure falls below 920 millibars within a certain distance of a major city like Acapulco, then there is a payout. No insurance adjusters need to be sent out and see how much damage there was. No scenarios where the insurance company argues it was wind and not flood that damaged the property.
It’s a pretty fair system since an area of pressure that low would typically bring about a lot of damage. But the big thing is the speed of the determination and the speed of the payout. It is not necessarily more money from the insurer (like they’d ever go for that), but a quicker payout. The event happened and no one disputes that so insurers pay. That speed can make a huge difference in the recovery of the people on the ground. Considering that after Hurricane Sandy, Congress took three months to approve relief money, and that three years after Sandy some people are still waiting to get back into their homes, any increase in how fast insurance payments are made is worth looking at.
To be clear, these instruments are offered by re-insurers like Swiss Re and Munich Re. The policyholders are parts of the Mexican Government, not individual homeowners. But isn’t it worth exploring here?
Hurricane Joaquin will be staying out to sea, not making landfall. But we are experiencing a coastal storm right now, a Nor’ Easter. This is a garden variety Nor’ Easter; we get one like this every year, maybe a couple times a year. But this one has washed away a home in the Grassy Sound section of Wildwood, NJ. Read all about it in the Press of Atlantic City story here.
All the sand in the world on the beaches of Wildwood would not make the least bit of difference to these folks. The same can be said for all of NJ’s 127 miles of beach.
This is why we need more Rethinking. If you believe we will just rebuild (again) after the next Sandy, listen to these three stories of people getting government aid to rebuild by Scott Gurian of NJ Public Radio and NJ Spotlight. The process of dishing out government aid and rebuilding is so messy, so inefficient, and so fraught with pitfalls that we should Rethink at every opportunity and get these homes out of harms way.
Given the choice, do you think these people would have taken a government buyout of their property before the storm? Or the living hell they are going through now trying to Rebuild afterwards?
Or is it accountants with coastal properties? Whatever. The point is that these folks crunched the numbers on what it would cost to get some flood-prone properties out of harm’s way. In just five cities in the Hampton Roads area of Virginia, the cost was staggering. A great read in the Washington Post’s Wonkblog called The Huge, Hidden Cost of Protecting Homeowners from the Rising Sea
Think a $100 billion hurricane can’t happen; think again. It already has. The Hurricane of 1821 has been analyzed by the re-insurance company Swiss Re. A re-insurance company insures insurance companies. They took at closer look at available information from the 1821 storm and determined that if it were to hit today, it would cause $100 billion in losses. Full report here, which they have just called, The Big One.
Mind you folks, this is not some meteorological fantasy; mother nature has already dished this one up for real. The reasons it would cause $100 billion in losses now are a combination of:
Mick Huckabee feels “blessed” to have a $3 million, 11,000 square foot beachfront vacation home in Florida. We think he is blessed to have federally subsidized flood insurance and a Florida DEP that basically looks the other way and approves every application to build houses where beaches and protective dunes really should be. That is just one of the stories in part 2 of Reuters’ series on Sea Level Rise.
NJ Future brings you a screening of the excellent film about beach Replenishment, Shored Up. The film will be shown in Rumson on September 20, 2014 at the Holy Cross School 40 Rumson Road, 7PM to 9PM. This is right next to Sea Bright, which has been called the most engineered beach in NJ. There will be a panel discussion after the film with the film maker and experts appearing in the film.
We need your help to stop this insanity! Take the time to register your comments, info below. Here are some suggested elements.
This is a 1000 page rule proposal. Public hearings began just as the summer vacation season got underway in late June, and the written comment period ends on August 1st. This is not an appropriate amount of time for the public to digest this sweeping rule overhaul.
The proposed coastal development rule changes do not take into account climate change, future storms, or rises in sea level along the Jersey Shore, which is a recipe for future disasters.
The proposed coastal development rule changes do not incorporate lessons learned from the devastation to New Jersey coastal communities from Superstorm Sandy, calling for increased development in hazardous coastal areas.
A proposed new class of permit, “permit-by-certification” is also cause for concern, as this will allow permit seekers to obtain a permit automatically through a website, without review by NJDEP staff.
Make it personal! Add your true thoughts, feelings, and experiences. We all lived through this!
To make your voice hear on this disastrous rule change please go to http://www.nj.gov/dep/rules/comments/ Fill in your information (don’t worry you will not be added to any lists as a result) Where it says Select Rule-making, choose DEP Docket No. 03-14-04 Coastal Zone Management Rules and Coastal Permit Program Rules; proposed consolidation with amendments
3. Add a comment, up to 20,000 characters.