Friday, September 30, 2005

Insurance Rates in the Gulf Coast

Insurance pays a pretty important role in our society.  Through insurance, we are able to live our lives knowing that we’ll have an emergency financial cushion to land on should life take an unexpected bad turn.  The kind of turn a Category 4 hurricane can cause, for example.

Insurance also gives us a pretty good idea of how risky our lives are.  If you pay a lot more than average for a certain type of insurance, then you can safely assume that something regarding your life is riskier than normal.  If you make different choices and your risk level drops, then generally your insurance rates do as well.  For example, care insurance costs a lot more than normal for drivers that have a poor driving record or for those drivers who spend a great deal of time in their vehicle on congested roads.  Driving a lot in traffic or having a poor prior driving record indicates a greater risk that the driver will be in an accident, and so the insurance company charges more money for insurance to cover their increased monetary risk.  Similarly, smokers and obese people pay more for life insurance because, to be blunt, they’re more likely to die early than non-smokers or people who have a healthy weight.  Living in a fire or flood-prone area naturally increases the risk of losing a home to fire or flood, so the costs of homeowners insurance increase accordingly.

According to an NPR article, insurers are considering raising insurance rates along the Gulf coast as a direct result of Hurricane Katrina.  The rate increases are not to pay for the claims that the insurers are paying, but rather because Katrina, and Rita shortly thereafter, have illustrated that the Gulf coast is at a higher risk of catastrophic damage from hurricanes.  From a purely pragmatic perspective, this makes sense – if someone lives in an area prone to hurricanes, hurricane insurance should cost more, just as fire insurance costs more for homes built in western pine forests or next to scrub brush in southern California.

Some consumer advocacy groups are claiming that the insurance companies shouldn’t be raising rates.  The advocacy groups claim that, since the Atlantic ocean has been in an active hurricane cycle since 1995, any insurance rate increases should have been applied for years now.  I’m not sure it’s quite that simple.

Residents of the United States, legal or not, have been generally settling along the coasts instead of in the interior of the country.  This settlement has increased the population of the Gulf states 14.5% from 1990 to 2000 and of the south Atlantic states (from Delaware south to Georgia) by 17.6%.  In terms of actual people, this is an additional 12.8 million people since 1990 and an additional 33.1 million people since the end of the last active hurricane period in 1970.  If we estimate that even 50% of those new residents reside in areas of the states that are at higher risk for hurricanes, that’s an additional 6.4 million people since 1990, and 16.6 million people since 1970, who need to be insured against losses due to hurricanes.

What does this mean for insurers?  Well, since there are millions of new residents living in the hurricane danger zone than there were at the end of the last active hurricane period, the insurers have far greater monetary exposure than they did 15 or 35 years ago.  And higher monetary risks for insurance companies means they charge higher rates for insurance than they would otherwise.

Now, price gouging (defined as demanding more money than is justified by supply, demand, and risk) is still wrong, and any insurer who cannot justify their rate increases with documented and explainable reasons should be called to account.  But increasing insurance rates somewhat throughout the Gulf coast region is entirely justifiable.

In some ways, I hope that the insurance industry does increase rate significantly.  When insurance is expensive, the expense makes homeowners and businesses think hard about the costs of living and working in a risky area.  Just as expensive federal flood insurance can convince a homeowner to pass on a home in a federally declared floodplain, so too can expensive hurricane insurance convince people living in hurricane-prone areas to live and work elsewhere, reducing the risk to insurers in the process.  And at the same time, the high insurance rates will ensure that only the businesses and individuals that truly need to live or work in a hazardous area will continue to do so.

High insurance rates for the Gulf coast are not themselves a problem, and if the insurance rates help to modify the risky behaviors that induce people to live in a hurricane-prone region of the country, then I don’t personally have any problem with higher insurance rates.

[Crossposted to the 5th Estates]

Thursday, September 29, 2005

The Micro-Pundit:  FEMA’s Purchasing After Katrina

I heard a great piece this morning on NPR.  In the article titled FEMA Accounts Reveal Last Minute Scramble, reporter Laura Sullivan reports, using their own documents, how FEMA issued no-bid contracts to buy everything from tents to underwear.  And things like the tents were ordered a week after the hurricane hit, against FEMA’s purchasing guidelines.  In addition, one of FEMA’s traditional supplies, ice, was viewed by former director Michael Brown as nonessential, even though ice is used not only to keep food from spoiling, but to keep bodies from decomposing before they can be identified and to keep medicines from spoiling.  Clark Kent Irwin, the former inspector general of Homeland Security and self-described conservative Republican, said that FEMA and the Department of Homeland Security are underfunded and couldn’t afford to preposition supplies for something like Katrina.

“Faster, Better, Cheaper” was the mantra of NASA, and it got us several crashed or useless billion-dollar space missions.  Faster, better, and cheaper doesn’t work for FEMA or DHS any more than it did for NASA.  As my boss said yesterday, “faster, better, cheaper, but by God, it’s got to work” is NASA’s new mantra, and it should be FEMA’s too.  And there’s no doubt that FEMA didn’t work after Katrina.  (Note that I’m not absolving the city of New Orleans or the state of Louisiana of responsibility – this entry is not about them, it’s about FEMA).

Tuesday, September 27, 2005

The Miscreant’s Dictionary:  “Violet”

violet

1. a pretty purple flower

2. a wimp

Monday, September 26, 2005

The Daily Mantra:  Faxes and Real Estate

Now that Jennifer, Bridget, and myself are moved (but not unpacked), it’s time to start up the real estate Daily Mantras.  I’ll dive into more detailed blogs when I’m not exhausted from a little girl who wakes up 4 times a night in her new surroundings, from not sleeping well myself because of new surroundings, staying up too late unpacking, etc.

Today’s Daily Mantra:

Do not attempt to buy or sell a home when the sellers are hard to reach by fax machine.

Monday, September 19, 2005

The Daily Mantra:  Moderated Comments

Comment spam has a much harder time getting posted when the site owner moderates all comments.

Sunday, September 18, 2005

The Miscreant’s Dictionary:  “Unfun”

unfun

the antithesis of something enjoyable or fun {ex:  “Packing to move is seriously unfun."}

Saturday, September 17, 2005

Blogsearch.google.com

I’m a big fan of Google.  I like the simplicity of their website, their news aggregator, and I occasionally use their directory service too.  Perhaps as they grow even bigger and compete more directly with Microsoft, I’ll come to despise Google as much as I do Microsoft, but until then, I’ll keep on using Google all the time.  This past week, they introduced yet another new service that I hope will be for blogs what Google itself is for search engines.  Goggle introduced a new blog search engine, blogsearch.google.com.

Now, I haven’t had a chance to look around too much at the search engine, but what I have seen thus far I like.  Namely, if I do a search on my name, blogs that I’m mentioned in by name come up.  If I search my website, the most recent 100 posts I’ve posted here at Thoughts in the Daedalnexus show up.  If I search for The Lullaby Pit or The 5th Estate, or The Moderate Voice then I find all of these excellent sites.

Now, the search engine isn’t anywhere near as comprehensive as Google’s main search.  For one thing, it relies on RSS and ATOM feeds, so any blog that isn’t fed this way won’t show up, at least for now.  For another thing, Google’s new service currently only lists blogs that are newer than June, 2005.  But according to this Geek.com article, Google is working on fixing that.  For people like me or Sam of The Lullaby Pit who have been blogging for years now, having our older writings available would be nice.  Of course, since my own writing has improved rather dramatically since 2002, maybe this will be a mixed blessing….

Other blog listing sites like Technorati may suffer for Google’s entry into the marketplace.  But I’ve never been able to find what I’m looking for at those other sites anyway, so while I’m concerned, I’m not freaking out over it.  And if I can find what I’m looking for at Google when I go looking for it, then Google will again grab my eyeballs (OW!) and keep them from wandering over to Yahoo (I’d add MSN too, but I only rarely visit that wretched hive of scum and villainy).

UPDATE
My wife pointed out that I mis-typed.  I said that blogsearch.google.com only had “blogs” later than July 2005, when in fact it’ll find any active blog that is RSS or ATOM fed.  I used the word “blog” as a synonym for “blog entry”, which could have been confusing.

In addition, I’d like to point people to a very, very, very useful feature of blogsearch.google.com.  This feature alone may be the stake in the heart of every other blog aggregator there is.  Do a search on, say, “buckytube.” You’ll get a totally dismal 5 hits (I really need to write that blog...).  Scroll down to the bottom of the list where you see “Subscribe:  ATOM (...) RSS(...)” If you click on the feeds, you’ll get XML code that points you to these five sites and that will automatically point you to additional syndicated feeds that use the term “buckytube” whenever something new shows up on Google.  Copy the link and paste it into your favorite RSS or ATOM feed reader, Firefox, Thunderbird, or other RSS/ATOM reader and you’ll get “buckytube” blog news forever more.

Cool....

Friday, September 16, 2005

Constitutional Pledge?

Ever since a federal judge ruled a couple of days ago that the Pledge of Allegiance was unconstitutional, I’ve been hearing about why it is and why it isn’t.  I’m certainly of the opinion that it isn’t (and have said so indirectly in several blogs, namely In Support of Creationism and Why Separate Church and State) and made that point in the Comments of an entry at The Moderate Voice.

A new entry at The Moderate Voice talks in great detail about why the Pledge of Allegiance as it currently is worded is unconstitutional, and I recommend that anyone with an interest in this debate give it a good read.

Wednesday, September 14, 2005

The Daily Mantra:  Real Estate Paperwork

Read all real-estate paperwork very carefully several times and be sure all the I�s are dotted and the t�s are crossed when contracting on a house.

Tuesday, September 13, 2005

The Micro-Pundit:  Argumentum ad Hominim vs. the MSM

There is a trend in the U.S. these days that I find very, very offensive.  Actually, there are many thing happening in the U.S. that offend me, but I’m thinking of one in particular this time.  What’s offending me today is the tendency to reject all journalism from a news outlet because it happens to be from the particular news outlet rather than on the merits of the journalism.

For example, if you look in to the comments on this The Moderate Voice entry, you’ll see down below my first comment a comment by “Sandy” that says in part “[I cite] the New York Times, but one can think of few sources LESS evenhanded or “balanced” than the Times.” Now, the New York Times certainly has had its issues.  Jason Blair comes immediately to mind, as does the erroneous reporting leading up to the Iraq war by Judith Miller.  But a liar and someone who was fed disinformation and reported it as data doesn’t mean that the newspaper’s entire journalistic output is automatically suspect.  Or rather, it shouldn’t mean that.

I’m not a fan of the Wall Street Journal, the San Diego Union Tribune, or the Miami Herald, but each of these papers occasionally does some fantastic journalism.  And when I find excellent journalism, the political leanings of the editorial board don’t color my impressions of the reporting.  This is, in my not so humble opinion, how it should be.

We’ve entered an era when ad hominim attacks on the sources of news because of their political leanings has become commonplace.  It’s far easier to scream “The New York Times is a liberal rag!” or “Fox News can’t get O’Reilly’s head out of Bush’s ass!” than it is to reasonably debate the data.  Instead of having honest debate on an issue with data provided from a variety of sources (partisan and non-partisan alike), we’re attacking the authority of the sources themselves.  And in so doing, we’re driving the country further and further from civil discourse.

Unfortunately, this is a tactic born of political expediency.  When you’re fighting tooth and nail to keep your supporters as your supporters, limiting their access (via one of the most effective techniques ever developed – peer pressure) to opposing viewpoints is highly effective.

Every news outlet, be it radio, television, print, or blog, has its inherent biases.  But please, try to look beyond the editorials and the commentaries to find the jewels that represent good journalism.  They exist, somewhere, at every single news outlet that attempts to be a journalistic source.