An inconvenient truth about insurance costs
Property owners along Alabama's Gulf Coast are experiencing the sticker shock that drove people of moderate incomes away from their beach homes.
Surf lovers gave up their little cottages to land speculators. And as ownership turned over, prices soared.
Now, insurance rates threaten to drive out the new owners who are caught in the combination of rapid property value increases, seeing their property taxes increase and having to pay for repeated hurricane damage. Some can no longer afford their investment.
For instance, insurance for the 35-unit Romar Tower at Orange Beach jumped from about $35,000 to more than $424,000 per year.
The value of the two Four Seasons towers jumped from $12 million to $24 million after renovation following Hurricane Ivan. But taxes went up, too.
Up and down the beach across the Gulf Coast states, the story is the same. Insurance companies hit owners with bills that put a strain on their wealth. Some owners likely will follow in the paths of the long-gone beach-house owners and sell to owners who can better afford the higher costs, and take a good profit.
But the ripple effect will still reach the people who love to spend a week or weekend at the beach. They are going to pay higher rental prices, too, and some won't go back.
Many people are leaving the coast for the protection of lakefront living away from hurricanes. That in turn has land along just about all rivers going for prices that may be more costly than building a home on the small plot they buy.
Ironically, a politicized environmental issue causes part of the problem. Global warming, weather experts say, will cause more hurricanes to form in the Caribbean, which means more of them will strike the Alabama Gulf Coast.
Thus insurance companies are raising rates not only to pay for existing damage, but also in anticipation of more hurricanes.
The cost of going to the beach is a small problem compared to the one that global warming will cause. Conservative politicians call former Vice President Al Gore a kook and an alarmist about the environment. But people should see the documentary movie "An Inconvenient Truth," featuring Mr. Gore.
There is a connection between global warming and insurance rates!