Who Insures Galveston?
Jim Mitchell, in The Dallas Morning News Opinion blog, poses a tough question: "Are the economic benefits to the entire state of tourism and other businesses along the coast enough to justify subsidizing the insurance costs in a Hurricane Alley?"
The question arises because of a bill being debated in the Texas legislature (H.B. 911 -- isn't that a grand title, Mitchell asks). The state's insurance fund of last resort is broke and H.B. 911 would limit the insurance coverage of primary residences, second homes, rent houses, condos, apartments, and commercial buildings, making much of the development on the Gulf Coast uninsurable.
On the one hand, it makes no sense for homeowners throughout the state to subsidize insurance for those who choose to live in the path of hurricanes, where it's not as much a matter of if (as in tornado alley) but when a disaster will strike.
On the other hand, there is no doubt that tourism and other businesses on the coast generate millions of dollars of revenue for the state. I haven't seen the analysis, but I'd be surprised if someone can demonstrate that those millions greatly exceed the losses due to Hurricanes Katrina and Rita and Ike. So, the subsidies are indeed subsidies and not investments that pay themselves back in tourism dollars.
In the end, the question is not so tough. I hate to lose my own fun in the sun, but I can't justify subsidizing construction on barrier islands. The risks have grown so great that private insurers won't cover the construction at any price. Now H.B. 911 is a sign that the taxpayer is balking, too. Everyone, it seems, except the Gulf Coast homeowner, is coming around to recognize that the costs outweigh the benefits.
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