Florida insurers have a new business plan in the wake of Hurricane Ian: don’t pay out on homeowner policies

Most of the major home insurers – Allstate, etc. – have already pulled out of Florida. The smaller ones who’ve moved in and charged residents skyrocketing rates are, in the wake of Hurricane Ian, finding myriad and legally questionable ways to simply not pay for the damage wrought by that historic storm last September:

However, the American Policyholder Association, a nonprofit insurance industry watchdog group, disagrees. It said in a statement that it has found “compelling evidence of what appears to be multiple instances of systematic criminal fraud perpetrated to cheat policyholders out of fair insurance claims” and will be submitting criminal referrals to authorities “in Florida & several other states” in the coming months.

Four homeowners confirmed to The Post that they had received only a small portion of what they had been promised in their determination letters from Heritage and Florida Peninsula, or were struggling to get straight answers and considering taking legal action. Meanwhile, their homes are still heavily damaged or uninhabitable. And more than 33,000 Florida homeowner claims linked to Ian are still open without payment, while more than 125,000 were closed without payment, according to the Florida Office of Insurance Regulation. Nearly 56,000 claims were open with payment and 183,235 were closed with payment.

Florida’s insurance market has been teetering toward collapse for years. After destructive storms in 2005, several big carriers including State Farm pulled back coverage in the state, and newer, more thinly financed, smaller companies swooped in and began to operate. Then came 2017, one of the costliest hurricane seasons ever. Hurricane Michael battered Florida the following year.

Adjusters said they started to see carriers greatly reduce damage estimates, fully deny roof replacements more often and force claims of a certain value into litigation. Payouts started to get delayed or not come at all, adjusters and attorneys said.

At the same time, rates kept rising, and fast. Florida homeowners paid an average of $4,231 for home insurance in 2022, nearly three times the price in any other state — and rates are expected to increase again this year. Ten property insurers that operated in Florida have gone insolvent since January 2021. About 125 property insurers remain in the state, but experts said many are either not taking on new business or are greatly limiting policies because of the volatile market.

This is, of course, unsustainable in a climate where hurricanes are becoming more numerous and powerful with each passing season.

I’ve lost track of how many of my friends have moved to Florida.

I get why that happens for people who, unlike myself, find winters up north to be intolerable, especially as you get older.

I suspect there will be an increasing number of them who will eventually have to move out of Florida because they cannot afford to insure their homes, or they will suffer catastrophic losses in the killer storms to come.

Before Hurricane Ian (left) and after.

Chicago’s floods are getting worse as torrential rains become more commonplace

There was one terrible torrential rain when I lived in Chicago in 2014. It was crazy. Underpasses and streets filled with water. Basements flooded everywhere. I remember thinking, “How does a city this size not have adequate drainage?”

The sub-basement and elevator shaft flooded in my six-story 1960s building in Edgewater a block from Lake Michigan. (The common areas of the building smelled like mold the rest of the time I lived there.)

I was on the eastbound 77 Belmont CTA bus in a city where it was total traffic gridlock. The standing-room only bus had moved less than two blocks in an hour. We finally reached the edge of a giant pool of water in an underpass under a highway. The bus driver started to inch his way across the newly formed lake under the bridge. Water started rushing into the bus around everyone’s feet.

Next to me was a toddler whose mother was standing next to him with a smaller child already in her arms. The toddler started screaming so I picked him up. The mother smiled at me and said, “Thank you.”

The bus stalled with water just above the tops of my shoes.

We managed to get the doors of the bus opened and I waded through the water, holding the child above my shoulders, to safety. I walked home three miles soaked.

They called it a 100-year rain event. Except it hadn’t been 100 years since the last time it had happened. Not even close.

It hadn’t even been been five years since Chicago was hit again Sunday, Sept. 11. It had only been since last May when flooding torrential rains had hit the city.

As the water rushed in on Sunday, he wondered why the sump wasn’t working.

“Turns out, it wasn’t plugged in all the way. One of the dogs probably knocked it loose,” Meyer said. He pushed the plug further into the outlet and water began draining immediately.

He realizes he was lucky.

“A neighbor from a couple blocks away posted a video of a geyser of water shooting up from a sewer opening in the street,” he said.

While heavy rains and flooded basements may go together for a lot of Chicago residents, Sunday’s steady rains were unusual, at least in one respect, according to the National Weather Service.

The rainfall rates were more akin to those that can occur in tropical weather conditions or even during hurricanes, said Todd Kluber, a National Weather Service meteorologist.

“We were seeing total rain rates [that] were about 6 to 8 inches per hour,” Kluber said Monday. “Typical rainstorms are about 3 to 5 inches.”

That means if rain continued to fall at that rate for an hour, it would’ve accumulated to as much as 8 inches of water, but it only lasted about 10 minutes, which resulted in about 1 inch of water — still significant enough to induce flooding throughout the city.

Crazy. It won’t take too much more of this and a lot of people in Chicago won’t be able to get flood insurance.

State of Florida loses yet another major homeowner’s insurance company

With hurricane season pressing down on Florida, yet more state residents are suddenly finding themselves without home insurance.

One of Florida’s largest home insurers is exiting the market, leaving thousands of homeowners scrambling to find new coverage as options continue to dwindle in the Sunshine State.

United Property & Casualty Insurance Company, based in St. Petersburg, announced Thursday that it filed a plan of withdrawal in Florida and also plans to exit three other states.

It comes right in the middle of hurricane season and amid an exodus of companies from the market.

Dr. Allen Lavina and his wife purchased a home in Sunrise back in 2019. The first-time homeowners were able to secure insurance and made their mortgage payments on time. But, recently, the couple was given a notice from their insurance company: “we’re reducing exposure in the area.”\

Homeowners said the state needs to do more.

“If they try to put some patches or Band-Aids on it, we still have an existential dilemma,” Quinones said. “Like, how are we going to live in Florida?”

Homeowner Neal Bloom also expressed disappointment in the government’s response.

“I’m very disappointed the Florida government refuses to acknowledge or do anything for relief,” Bloom said. “I’ve sent emails to my congressman but none of their replies was what I wanted to hear. We have a small mortgage on our home, very high credit scores, pay our bills on time. So I think it’s unfair that people in our situation are penalized because others decided to file fraudulent claims for new roofs from prior hurricanes, which was the excuse I’m getting as to why we were dropped just like that.”

These people might consider that hurricanes are the primary causative factor in the insurance dilemma, and not the roof repairs done after the hurricanes.

I know about 8 families personally who’ve moved to Florida in the last few years.

I get it. Sunshine and warmth in the winter.

But state and local governments seem unable or unwilling to stop rampant construction in large swaths of the state that should be development-free zones.

Guess the insurance companies are going to make those decisions for them.

Thanks to Inflation Reduction Act, even publicly owned power companies will now have incentives to invest in clean energy

I did not know that my home state of Nebraska is the only state in the union in which 100 percent of electricity is provided not by Wall Street corporations (Investor-Owned Utilities or IOUs), but rather by publicly owned utilities.

It’s been that way since Nebraska ran the last IOU out of the state in 1949, thanks primarily to the state’s forward-thinking US Sen. George Norris. (A short history of how this happened can be found at this link.)

However, one drawback to all of this is that incentives by the U.S. government for power companies to invest in clean energy come in the form of tax credits. This has created problems, as the American Public Power Association (APPA) wrote in this June 2022 report:

Since the 1970s, Congress has used federal tax incentives to encourage certain forms of energy investments in the United States. In more recent years, Congress has expanded and extended such incentives to promote non-emitting energy resources to address climate change. Arguably, tax expenditures are the single most powerful federal tool used to incentivize wind, solar, geothermal, and nuclear power development in the United States.

However, most of these incentives do not work for public power utilities, which are, as units of state and local government, exempt from federal taxation. The American Public Power Association (APPA) believes that if Congress has market-wide policy objectives, such as addressing climate change, then tax-based energy incentives should be drafted to accommodate tax-exempt entities, including public power utilities. Congress is considering making such tax credits “refundable” beyond an owner’s tax liability and public power utilities should qualify for these credits. In addition, because this approach is novel, APPA strongly encourages Congress to enlist public power representatives in drafting such proposals to avoid unintended consequences.

Well, Congress apparently listened because the IRA takes away this roadblock to public power utilities being able to access these clean energy incentives, as noted by Ryan Cooper in his article for TAP:

The Inflation Reduction Act (IRA) has all kinds of goodies in it: tax credits for homeowners and businesses to install rooftop solar or upgrade their appliances, credits for electric vehicles, money for clean-energy research, and much more.

But there are two provisions that have largely flown under the radar in the discussion of the bill. These are “direct pay” and “transferability,” which will be two of the biggest drivers of emissions reductions in the power utility sector over the next decade. Moreover, the first provision marks a quiet break with decades of American policy orthodoxy, and a lesson in the value of public power.

Let me first review some history. There have been two major kinds of clean-energy tax credits: an investment tax credit (ITC) for installing new clean-power generators, first passed in the 1970s, and a production tax credit (PTC), first passed in the 1990s, for actually producing it. They worked just like you’d think: allowing a deduction from one’s taxes for clean-energy investment or production. And to be fair, these credits actually have driven considerable investment in clean power and therefore lower emissions.

But there were problems. Public power utilities pay no taxes. No taxes. No incentives. Because public power companies and co-ops provide nearly a quarter of American power generation, this created a large roadblock to decarbonizing the electricity sector.

Direct pay in the IRA, by contrast, now means these non-tax-paying entities can receive the credit as a cash payment—basically turning the ITC and PTC into a grant for them. It’s similar to the Earned Income Tax Credit for individuals, in which the working poor receive a “tax refund” even though they may not pay anything in federal income tax.

The new ITC base rate is 6 percent, while the PTC is 2.6 cents per kilowatt-hour produced (though you can only claim one). However, if a producer complies with wage and apprenticeship requirements, both credits are multiplied by a factor of five—a very strong motivation indeed to provide good jobs.

The more I learn about the Inflation Reduction Act, the more I love it. (Despite its drawbacks.)

You can read the rest of the TAP article at this link.

This southern city is considered a leader in climate change and urban planning

If you visit South Florida even now, long after the extreme risks for the region from climate change became known, there are still construction cranes everywhere. High-rise apartment buildings and low-rise condominium complexes are being built at breakneck pace.

For developers, the calculation is an easy one. Governments still allow them to build in flood-prone areas, eager for the property taxes. And with around a 5-year window from the start of a project to selling out all the units, developers and real estate interests will have their money long before climate change forces property values down as everyone assumes will happen eventually in South Florida.

The rich get their money and the taxpayers end up bailing out the people and businesses wiped out by super storms. It’s the privatization of profit and socialization of risk. Because even the most MAGA-nutty person screaming about socialism will have his hand out when he loses everything.

But in one southern coastal city, municipal leaders are starting to crack down on building in disaster prone areas.

To preserve their fiscal bottom lines, municipal officials now beg, plead, and cajole whole neighborhoods (particularly high-end, property-tax-bearing ones) out of floodplains and other high-risk areas. In particularly hard-hit locales, governments may not have to twist many arms: As storms grow in both frequency and intensity, more people will likely be willing to accept buyouts—as most Staten Island residents did in the Oakwood neighborhood after Hurricane Sandy.

The buyout picture is likely to remain especially fraught for many African American communities where homes were undervalued by design, according to A.R. Siders of the University of Delaware’s Disaster Research Center. In a number of those communities, properties were purposely situated in flood-prone areas that never enjoyed basic residential services and were redlined to keep property values down. Factor addressing inequities into the buyout calculus.

In Charleston, South Carolina, Dale Morris, the city’s chief resilience officer, believes that Americans need to reassess their relationship with water. The frequent recurrence of what Morris calls “storms of impact” that are more intense and longer-lasting has begun to influence the city’s decision-making in ways that even a historic storm like Hurricane Hugo in 1989 did not. Now home to 150,000 people, Charleston suffered extraordinary levels of inundation for several years beginning in 2015, a period that included Hurricane Matthew in 2016 and Tropical Storm Irma in 2017.

Today, Charlestonians have a new appreciation of how rain, wind, and bodies of water interact. “People began asking questions like ‘What do we do about this new development that I think is causing flooding downstream? What do we do about larger land use policy, so we don’t make the mistakes that we made 50 years ago because things have changed?’” says Morris, who worked as a senior economist for the Netherlands Embassy for more than two decades and coordinator for Charleston’s Dutch Dialogues, an initiative sponsored in part by the Netherlands that helps local communities assess flooding issues.

With neighborhoods that regularly flood spread across a landmass that features a peninsula and the outflows of three rivers into the Atlantic Ocean, Charleston has taken an aggressive stance on managed retreat. The city has secured FEMA grant money for one neighborhood that already had nearly 50 homes purchased and demolished, and is regulating development in low-lying areas that in the past would be filled for development, such as the 100-acre Johns Island tract of land that would have sited 240 homes. Some city councilors were ready to ban fill outright, Morris says, but the city opted instead to regulate fill through stormwater regulations, so that it can be used “judiciously.”

These advances catapulted Charleston into the vanguard of proactive communities—for a reason. “Charleston has been so active because the risk is there, and they feel it,” says Morris.

You can read the rest of The American Prospect article by Gabrielle Gurley at this link.

GOP dark money group masquerades as pro-climate organization in an attempt to scuttle Schumer-Manchin legislation

Beware of what ads you read and believe, even if they seem to be from progressive groups that are on your side.

Because the Republicans — along with the Russians — are spending money to place ads against the Inflation Reduction Act which appear to come from pro-climate groups.

POLITICO’s New York-focused newsletter, New York Playbook, has been sponsored by a group called United for Clean Power every day this week.

In each edition of the popular newsletter, the group has urged New Yorkers to oppose the historic $369 billion climate policy deal reached by Senate Democrats last week, arguing it does not go far enough to save the planet.

“The time to take action on planet-saving climate change legislation is NOW,” reads one of the group’s ads. “Demand true environmental justice from your Democrat colleagues or block the Reconciliation bill.” Another ad reads: “Demand real climate change action in the Reconciliation package, or kill it altogether.”

Similar ads from United for Clean Power have been spreading on Facebook and Google this week, too. The group has spent $11,527 on Facebook ads in the last week, as well as $15,300 on more than 100 Google ads shown in all 50 states.

United for Clean Power looks a lot like a progressive advocacy group. After all, many climate-justice focused groups have raised alarm about the deal because of its many gifts to the oil and gas industry, courtesy of Democratic Senator Joe Manchin.

But United for Clean Power is not a progressive advocacy group. According to reporting from Nick Seymour and Kyle Tharp at the FWIW newsletter, United for Clean Power is a Republican-linked dark money group, and most likely an attempt at deceptive astroturfing.

In other words, Republicans are trying to kill historic climate legislation by tricking progressive voters into believing that’s the best thing to do for the climate. And platforms like POLITICO, Facebook and Google are aiding in that deception by allowing the ads to spread unchecked.

The Republicans are running scared as the Democrats chalk up victories that could change the math of the midterm elections.

You can read the rest at this link.

The first climate bill in 50 years passes the Senate

Fifty years! That in itself as an indictment of our political system and a reason to celebrate.

The Inflation Reduction Act (IRA), finally passed by the Senate and on its way to nearly certain passage in the House, is not all that for which any thinking progressive could hope.

Some on the left are trashing the bill as not doing enough, and for some fossil fuel and Wall Street give-aways that were inserted to get the support of the Senate’s two spoilers.

It’s sad that those sweeteners had to be included, but until Democrats have a 52-seat majority, that is the way the game of politics has to be played.

The NY Times has an analysis piece up about the victory that gives an interesting timeline for the win, along with some examination of Republican mistakes along the way:

But Democrats pointed to approval of long-sought authority for Medicare to negotiate lower drug prices as something that would appeal to voters, along with the general sense that Democrats were finally getting things done on Capitol Hill. They relished the prospect of reminding voters that Republicans had voted against the drug-pricing measure, and forced Democrats to drop a proposal that would have capped the monthly cost of insulin at $35 for private insurers.

They also pointed to the climate change provisions as a huge leap forward, though not as extensive as Democrats had initially hoped to achieve before Mr. Manchin forced the party to pare back its goals.

“It’s a historic climate bill, and it wasn’t on the scoreboard one month ago,” said Senator Edward J. Markey, Democrat of Massachusetts and a leader on climate issues. “Senator Schumer, working with Manchin, has been able to pull out the key climate provisions that we need. It is not all that we wanted, but it was what we need to begin this effort to lead the rest of the world.”

Democrats also got some help from Republicans. Not only did the blunder on the veterans bill play into their hands, but Democrats said a threat by Mr. McConnell to block the microchip bill should Democrats proceed with the climate and tax bill backfired by motivating Mr. Manchin to pursue a compromise.

“Any time you threaten a bill you support because you are not getting your way on something else, you are in a bad spot,” said Senator Chris Van Hollen, Democrat of Maryland. “It just looks bad. It was so crassly political.”

Were the whole of Capitol Hill not crassly political we might not be in the mess we are in. But I understand what Van Hollen was trying to say.

I’m already seeing obvious bots and other fake accounts, no doubt partially from Russian troll farms, flooding my Facebook and Twitter feeds with supposed progressives trashing the Democrats for this win. Make no mistake: the IRA is a flawed, huge win.

You can read the rest of the Times piece at this link.

Today’s the day for what could end up being Biden’s signature climate change law

Keep your fingers crossed because, as this WaPo article notes, today could be the big day:

Senate Democrats were poised to begin debate Saturday on a sprawling bill that aims to lower health-care costs, combat climate change and reduce the federal deficit, a critical step in a grueling legislative journey to deliver on President Biden’s long-stalled economic agenda.

The new push to consider the measure, which Republicans unanimously oppose, came seven months after internecine bickering scuttled Democrats’ last efforts to adopt a package that many in the party regard as essential for retaining the House and Senate in this year’s midterm elections.

Even with the changes Sens. Manchin and Sinema required before they’d sign-on, I’ll be shocked if this passes. If it does pass, don’t let anyone tell you differently: this legislation is a BFD.

It’s rare that legislation passes Congress with this many supremely powerful interests — banks, billionaires, Big Pharma, etc. — lined up against it.

Sen. Susan Collins threatens to torpedo same-sex marriage bill over Manchin/Schumer maneuvering

Sen. Susan Collins (R-ME) is such an unprincipled pig, and I don’t call someone childish names like that very often.

But that’s what she is. An opportunistic political whore devoid of deep principles and convictions.

How else to explain this?

Sen. Susan Collins, one of a handful of GOP senators working to garner support in her party for a bill to codify gay marriage, said the Democrats’ surprise embrace of a tax and climate change bill made her job much harder.

“I just think the timing could not have been worse and it came totally out of the blue,” the Maine senator told HuffPost Thursday about Senate Democrats’ unveiling of their bill to raise taxes on some companies, boost IRS enforcement and spend the resulting money to fund anti-climate change efforts.
news that West Virginia Democrat Joe Manchin and Senate Majority Leader Chuck Schumer (N.Y.) had arrived at an agreement broke like a thunderclap over official Washington early Wednesday night. The bill still faces hurdles, including ensuring all Senate Democrats are on board and will be available to vote on it when it comes to the floor. But if Democrats pull it off, it could be a big political victory for the party and the White House.

Sen. Susan Collins (R-Maine), seen here on the right talking to fellow Republican Sen. Lisa Murkowski (Alaska), said the news that Democrats are making progress on a tax and climate change bill hurt bipartisan efforts to codify gay marriage, which she and Murkowski support.TOM WILLIAMS VIA GETTY IMAGES
Still, Collins warned that the manner in which that victory was secured, where it appeared Democrats kept Manchin and Schumer’s negotiations under wraps until a separate bipartisan computer chip production incentive bill was passed by the Senate, hurt the effort to gather support among Republicans to bring the gay marriage bill to the floor.

“After we just had worked together successfully on gun safety legislation, on the CHIPs bill, it was a very unfortunate move that destroys the many bipartisan efforts that are under way,” she said.

You can read the rest here.

Susan Collins