As Hurricane Ida approached New Orleans on a sticky August morning in 2021, Janet Tobias listened to the news, trying to decide if she should evacuate. While she packed, family members called to report they were stuck in fleeing traffic. Fueled by abnormally warm waters in the Gulf of Mexico, the storm strengthened rapidly. As it began to pour, Tobias, who is in her sixties, decided she’d have to take her chances at home.
By the time the Category 4 storm made landfall, it was one of the strongest to ever hit Louisiana. It tore through the bayous, lashing boats ashore and splintering telephone poles. Tobias was terrified. Then the power went out. Alone in the darkness, all she could hear was the roar of the wind. “I never been that scared,” she says.
When the dim morning light finally broke, Tobias found she’d been comparatively lucky: Her porch railing was torn off, and eight windows were shattered.
In the days and weeks to come, her insurer, Americas Insurance Company, was slow to respond to her $5,000 claim. Like many other companies drawn to Louisiana by its generous government subsidies, Americas Insurance had grown rapidly, increasing its portfolio in the state by 552 percent over a decade. But in Ida’s aftermath, Tobias was one of more than half of its policyholders to file claims — and Americas Insurance didn’t have nearly enough liquidity to cover the $230 million in damages.
It is important to note that it is all the insurance companies authorized to do business in Louisiana that fund the Louisiana Insurance Guaranty Association. Those companies pay not just for the administration of that Association but also for all the losses incurred when the Association inherits claims from insolvent insurance companies who apparently underwrote their policies at lower rates than needed to stay solvent. The conclusion that only rich and poor people will soon be living in the Louisiana coastal areas is not wrong, factually or morally. The reality is the entire coastal areas in the US subject to repeated storm damage will soon have to deal with extremely higher insurance premiums if climate change worsens storm damage. Either that or move out of these areas. Invariably state and federal funds end up being allocated to rebuild these areas after storm ravaged damage occurs. Why should the entire state or federal populations keep being pegged to bail out storm prone areas ? If one chooses to live in a capitalist society one should accept the good with the bad. If one cannot afford to live in an area targeted by repeated storms one should move inland to safer areas. Public dollars should not be used to encourage the stupidity of rebuilding areas repeatedly destroyed by storms.