Hurricane Sandy

[Zelandakh]

I hope everyone and their loved ones are doing ok. It seems like a really bad one from the reports we are getting over here. Hopefully it will lose power quickly as it heads inland.

[barmar]

Missed Hawaii 5-0 altogether.

All the CBS shows were replaced with reruns nationwide, I believe. In Boston we got the regular schedule on the other networks, with occasional brief interruptions for storm updates.

[barmar]

Didn't lose any power here in the Boston area, but I haven't been able to reach my mother on Long Island; both her land line and cell phone are out. I spoke to my sister in Queens, NY yesterday afternoon. She'd reached my aunt and uncle, who were staying with my mother (their town, which is on the south shore, was evacuated), via text messaging. They said they lost power as well, but at least they have heat and water.

[ArtK78]

Still not allowed to go into Atlantic City. An e-mail from my office today said that the office in Atlantic City was closed today but that we should anticipate going in to work on Thursday. As the city is still off limits, I don't see how that will happen.

 

The travel ban in Atlantic County was lifted last night, but the AC Expressway is still closed east of the Pleasantville exit - the last exit before Atlantic City.

 

In any event, it looks like a friend of mine is going to hold a poker game tonight at his home tonight, so I am going to go out of the house for the first time since Sunday.

[ArtK78]

Got out of the house last night for the first time since Sunday. No problems.

 

Today, the office was still closed since there is still no access to Atlantic City. I did drive around today - even went to the Home Depot on the causeway leading to Atlantic City on US 30. The police barricaded the road just at the entrance to the shopping center where the Home Depot was located. It was as far east as one could travel unless you were an "essential person."

 

Still appears as if Atlantic City will be off limits at least on Friday, as there are power and water problems in the City.

[blackshoe]

What do they do with "non-essential persons", shoot them?

[mike777]

Sandy is yet again going to raise the whole issue of Moral Hazard and should govt bail out people with expensive shore homes/property that flood or otherwise are destroyed and dont have insurance.

 

 

In economic theory, a moral hazard is a situation where a party will have a tendency to take risks because the costs that could incur will not be felt by the party taking the risk

[Winstonm]

Sandy is yet again going to raise the whole issue of Moral Hazard and should govt bail out people with expensive shore homes/property that flood or otherwise are destroyed and dont have insurance.

 

 

In economic theory, a moral hazard is a situation where a party will have a tendency to take risks because the costs that could incur will not be felt by the party taking the risk

Federally sponsored flood insurance is available to those who live in areas prone to flood - there is no moral hazard involved in choosing not to insure.

[mike777]

Federally sponsored flood insurance is available to those who live in areas prone to flood - there is no moral hazard involved in choosing not to insure.

 

 

Why not?

 

 

If the govt pays you if you dont have insurance and most people dont have flood insurance.

 

And while the federal government's National Flood Insurance Program will fill in some of the gap for flood losses that are rarely covered by private insurers, it won't fill the whole gap. NFIP only paid out $1.3 billion for flooding caused by Hurricane Irene when it cut a similar path of destruction in the Northeast a year ago, according to the trade publication Insurance Journal.

 

http://www.sodahead.com/united-states/federal-flood-insurance-wondering-how-many-actually-had-insurance/question-3286823/

[dwar0123]

Sandy is yet again going to raise the whole issue of Moral Hazard and should govt bail out people with expensive shore homes that flood or otherwise are destroyed and dont have insurance.

Source?

 

This doesn't sound like something I have ever heard of the government doing.

 

Two things I have heard of the government doing that relates to this.

 

Buying peoples land so they can allow it go fallow so they don't have to invest in restoring infrastructure/creating expensive levees.

 

And creating expensive levees.

 

I have also heard of the government being sued when levees failed, not sure that has ever been successful nor even relevant here as I don't believe they have many levees on the eastern seaboard.

[mike777]

"This doesn't sound like something I have ever heard of the government doing."

 

 

I am rather surprised you never heard of the govt helping people rebuild their homes or property.

 

You can google many examples over the decades.

[dwar0123]

"This doesn't sound like something I have ever heard of the government doing."

 

 

I am rather surprised you never heard of the govt helping people rebuild their homes or property.

 

You can google many examples over the decades.

I'm claiming they don't exist, you are claiming they do exist, you provide the examples.

 

With respect to hurricane flooding.

[luke warm]

more (typical) union stupidity... not union? go home

[mike777]

This may shock you but I dont work for you..I told you how to find the information if you really want to know...

 

If you just want to argue forget it....

 

 

to be polite here is just one example, ::

 

 

Apply for a grant from the Federal Emergency Management Agency, which make grants available to homeowners who were involved in a disaster. However, the funds will not exceed 75 percent of the damage done, so another 25 percent will need to be found through other grants, private funds or the homeowner's own money.

 

Read more: How to Get a Grant to Rebuild My Home | eHow.com http://www.ehow.com/how_7778446_grant-rebuild-home.html#ixzz2B5M5stBP

 

 

Sandy is yet again going to raise the whole issue of Moral Hazard and should govt bail out people with expensive shore homes/property that flood or otherwise are destroyed and dont have insurance

[luke warm]

I'm claiming they don't exist, you are claiming they do exist, you provide the examples.

 

With respect to hurricane flooding.

he found them and doesn't need them

[ArtK78]

Office in Atlantic City opened at noon today for the first time since the hurricane hit. I was in a little earlier. Many experienced problems getting into Atlantic City, but there were no problems or delays on the route that I took into the city (except for a short lane closure on the causeway where an electric crew was working on the lines). I heard that there was at least one checkpoint at which anyone heading to Atlantic City was screened - providing a business card with an Atlantic City address was good enough to allow you to pass.

 

While I have not seen too much of the damage in the city, I do know that all of the traffic lights on Atlantic Avenue are still out. The casinos just reopened after being closed since Sunday afternoon. That is the longest closure since casino gambling began in Atlantic City 35 years ago. There are emergency crews out and about, and there appears to be some emergency activity at the intersection of North Carolina Avenue and Arctic Avenue (one block from my office).

 

The bottom line is that Atlantic City is now open for business again.

 

Yesterday, my girlfriend met with some friends of ours from Manahawkin - about 30 miles north of Atlantic City. They have bigger problems. They gave us some personal items to hold for them while they clean up from the storm. The storm related damage along the South Jersey Coast is significant, but it is dwarfed in comparison to the damage to the North.

[dwar0123]

Asking someone to source a claim they have made on a forum is not considered rude. Demanding others provide the proof of your own claims is.

 

That said, the proof provided is interesting. Certainty the government does more for individuals then I thought it did for areas declared a disaster.

 

That said, it seems most of the aid is in the form of temporary assistance and low cost loans.

 

This quote struck especially relating to your concerns.

The damaged home where you live is located in a designated flood hazard area and your community is not participating in the National Flood Insurance Program. In this case, the flood damage to your home would not be covered, but you may qualify for rental assistance or items not covered by flood insurance, such as water wells, septic systems.

 

http://en.wikipedia.org/wiki/National_Flood_Insurance_Program

 

Combining a flood insurance plan of last resort while at the same time requiring the community to create flood mitigation plans.

 

Apparently it is meant to be self supporting through premiums. Though it is a net lose currently.

 

It would appear that the NFIP is a mechanisms designed to prevent the moral hazard that concerns you and I still have strong doubts that expensive completely uninsured shore houses are the ones getting the few grants the government does hand out.

[barmar]

It seems to me that insurance companies cannot generally be expected to handle widespread disasters like this. The economics of insurance is pretty simple: for the company to stay in business, the income from premiums (and earnings from investing them) must be larger than the outflow due to claims. This model works well when the number of customers filing large claims is a small fraction of the customer base. But disasters don't work like this, they affect a huge portion of the customers. This explains why many insurance companies simply stop issuing certain types of policies in areas that are prone to certain disasters: either the claims will be too large, or they'll have to raise premiums to a level most customers aren't willing to pay.

 

This is why we expect the government to step in when disasters occur -- it doesn't have the same economic limitations that private industry has. But perhaps the way this should be done would be analogous to FDIC: insurance companies would join a federal program that allows them to apply for aid whenever a disaster occurs, so they can pay out claims to their customers. But homeowners would still be required to have insurance in the first place, they can't just freeload and expect to be bailed out when a disaster occurs.

 

Something that makes Sandy different, though, is that it hit many areas that don't generally consider themselves at risk from flooding. So the homeowners don't even think of buying flood insurance. Similarly, I doubt that Americans outside the vicinity of the San Andreas Fault buys earthquake insurance -- if a freak earthquake causes serious damage in the northeast, are we all out of luck?

[Scarabin]

It seems to me that insurance companies cannot generally be expected to handle widespread disasters like this. The economics of insurance is pretty simple: for the company to stay in business, the income from premiums (and earnings from investing them) must be larger than the outflow due to claims. This model works well when the number of customers filing large claims is a small fraction of the customer base. But disasters don't work like this, they affect a huge portion of the customers. This explains why many insurance companies simply stop issuing certain types of policies in areas that are prone to certain disasters: either the claims will be too large, or they'll have to raise premiums to a level most customers aren't willing to pay.

 

This is why we expect the government to step in when disasters occur -- it doesn't have the same economic limitations that private industry has. But perhaps the way this should be done would be analogous to FDIC: insurance companies would join a federal program that allows them to apply for aid whenever a disaster occurs, so they can pay out claims to their customers. But homeowners would still be required to have insurance in the first place, they can't just freeload and expect to be bailed out when a disaster occurs.

 

Something that makes Sandy different, though, is that it hit many areas that don't generally consider themselves at risk from flooding. So the homeowners don't even think of buying flood insurance. Similarly, I doubt that Americans outside the vicinity of the San Andreas Fault buys earthquake insurance -- if a freak earthquake causes serious damage in the northeast, are we all out of luck?

 

When I was active in insurance insurers met this problem with international reinsurance. Thus widening the base for premiums beyond the disaster area. Presumably they still do so.

 

 

Slainte,

 

Ian