Insurance is the Climate Change ‘Canary in the Coalmine’
The constant severe storms and tornadoes
across Texas, Oklahoma, Kansas and beyond this year are getting more
frequent. Watching small towns leveled,
trailers upended and huge ice balls hitting the ground is constant weather porn
on The Weather Channel or Fox Weather. Listening to escapees with southern accents
describe their dire situations is standard. In the homeland of the
neo-Confederacy, Texas, insurance rates are rising as in Florida and
California, but actually are worse given its unregulated market. Texas’ car and sprawl culture is getting its
blowback by nature.
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| # of climate disasters |
“Texas emits more greenhouse gas emissions than any other state, according to the
Environmental Protection Agency. It accounts for 14% of the nation’s
climate-warming emissions, and produces more than twice the total emissions of
California, the next largest greenhouse gas emitter. Texas is also the nation’s
largest oil and gas producing state, accounting for more than 40% of the nation’s oil
production.”
There have already been 16
disasters in Texas this year (2023) that cost $1 billion or more — a new state
high for billion-dollar disasters in a single year, according to
National Oceanic and Atmospheric Administration inflation-adjusted data. And that’s during a year when no hurricanes
struck the Texas coast: Almost all of those weather disasters were severe
storms. Over the last two years …
property losses from convective storms, which includes thunderstorms,
tornadoes, hail, and heavy rains, have dramatically increased.
The impacts are being felt on homeowner’s pocketbooks: Insurance
rates in Texas have skyrocketed 22% since the beginning of this year according
to an S&P Global analysis of Texas Department of Insurance data.” – Texas Tribune - 11/30/23
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“According to the National Oceanic and Atmospheric Administration,
between 1980 and 2023 Texas experienced an average of four natural disasters
per year with damages in excess of $1 billion—droughts, floods, storms,
tornadoes, wildfires, and winter storms. In recent years, such disasters have
become much more frequent. Between 2019 and 2023 Texas suffered an average
of eleven billion-dollar events each year, with sixteen in 2023
alone.”
Texans pay so much more than Californians thanks in part to our
business-friendly regulatory environment. Unlike California, where insurance
companies must seek state approval before raising rates,
Texas is a so-called “file-and-use” state. Here, insurance companies can
implement a rate hike first and seek state approval later—a variation on the
principle that it’s better to beg forgiveness than ask permission.” – Texas Monthly – 4/24/24.
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The last big Cat 4 hurricane in Texas was in
2017, Harvey, which severely flooded the Houston area, killed over a 100 people
and cost $125B. The recent environmental
disasters afflicting Texas are not from hurricanes – yet they wait in the wings,
perhaps for a final knock-out blow to some insurance companies. There is a rise in small and medium size insurance
companies going bankrupt across the U.S. and especially in the South.
While Texas does not have state income taxes it
does get its money in other ways like sales taxes and property taxes. Texas property taxes used to be the highest
in the nation – rising 26% between 2019 and 2023 - until state Republicans
realized that was a bad look and funneled $12.7B of ‘guvmint’ money into
property tax relief in 2023. This
affected how much schools and local cities could raise for taxes on property,
resulting in net cuts to them. This is
also during huge spikes in Texas housing values and because of this some just
saw a leveling off of property taxes. Facts from the Texas
Tribune – 4/26/2024.
Because of all these insurance and tax impacts,
foreclosures and evictions are rising in the Lone Star state – mostly in
Dallas, Houston, Fort Worth and Austin, according to Bloomberg.
The ‘golden hour’ is over, along with pandemic rent supports. Some Texas conservatives want to get rid
of property taxes themselves, which would put a $55B yearly hole in the state budget. Perhaps they can go to homeschooling
based on a Southern Baptist curriculum of Bible study. They can revert to volunteer fire departments, do-it-yourself trash collection, neighborhood funded road work, and use their guns to guard their neighborhoods.
So beware that construction company asking you
if you need a new roof on the insurance company’s dime because of that last hail
storm. They will actually just pitch this as ‘do you want a new roof?’ Do you
actually have damage that can’t be easily repaired? In Minnesota hail storms are increasing too and it
shows in the spike in Minnesota’s insurance-damage costs. A wing of capital is starting to
register the damage done, making insurance a national housing issue, not
just rising rents, house prices and property taxes. Housing is a human need and a human right, so
the fact that capital cannot provide it is another sign of its demise.
Rent Control. Restrict development in
ecologically sensitive areas like seashores.
Metal roofs to be mandated. Ban AirBnB and Vyrbo. National real estate
insurance. Freeze prices on
housing. Nationalize the insurance
companies. Take over empty properties. Socialize the land.
Prior blog reviews on this topic, use blog search box,
upper left, to investigate our 17 year archive, using these terms: “Texass,” “The Confession” (Grisham); “A
Confederacy of Dunces,” “Cranky
Yankee” or “Texas.”
Cranky
Yankee / June 1, 2024
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