Homes at risk

February 23, 2007

All along the Atlantic Coast, homeowners, insurance companies and state officials are trying to figure how to cope with the growing risk of catastrophic loss caused by hurricanes. What they've learned is: There are no easy answers.

Yet with global warming playing havoc with the weather, the quest for a workable solution in Maryland must be addressed quickly - with an eye toward prevention of weather disasters and incentives to reduce risk as well as providing a safety net for those caught in circumstances beyond their control.

The conflict results because insurers want to limit their liability by raising premiums or avoiding high-risk areas, mortgage companies insist on their investments being protected, homeowners demand coverage at affordable prices and lawmakers aren't yet agreed on how boldly the state should intervene.

Florida, for example, finds itself in the nightmare scenario of effectively self-insuring many billions of dollars' worth of the most vulnerable properties in the state but without enough money to pay the claims even a routine storm season would bring.

As a first step here, zoning officials everywhere in Maryland should reject out of hand any further waterfront development on tiny peninsulas or filled-in wetlands, or hovering precariously over piers and bulkheads. With water levels steadily rising, those luxury condo complexes are wrecks-in-waiting.

Homeowners can also reduce the likelihood of damage through measures such as fitting their homes with storm shutters, tightly securing roofs and tying down outside fuel or water tanks that could become projectiles in a strong wind. Incentives for prevention should be offered through premium discounts or state tax breaks.

Further, state Insurance Commissioner R. Steven Orr advises that Marylanders should seriously explore federal flood insurance because commercial homeowners' policies don't cover damage from rising waters.

At this point, Maryland is better off than some of its neighbors because it still has a competitive insurance market, as well as a state-backed insurer of last resort that's little used. Several carriers have sparked concerns in Annapolis by refusing to sell new policies to coastal homeowners. But a proposal requiring them to insure all comers in the state - or none - would likely result in the latter. And that's no solution at all.

In any case, the General Assembly shouldn't encourage property owners to tempt fate. Life along Maryland's lovely waterways will be far more secure if nature's power is respected and anticipated.

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