Hurricanes are Taking a Toll on Retirees
AccuWeather predicts a fairly normal 2019 Hurricane season. They expect to see 12 – 14 storms to develop in the Atlantic. “Of those storms, five to seven are forecast to become hurricanes and two to four are forecast to become major hurricanes.”
“Despite the predictions for a normal hurricane season, it only takes one storm to do incredible damage,” says Ellsworth Buck, Vice President of GreatFlorida Insurance, Florida’s top independent homeowners insurance company.
Hurricane damage is what retirees are concerned about, and it is driving many out of the state. About 52,630 people ages 65 and over left Florida in 2017, compared to 48,174 in 2016 and 43,356 in 2012, according to Jon Rork, professor of Economics at Reed College in Portland, Oregon, who studies retirement migration.
Rork told Money, “Many of these people have left Florida for states like Georgia and North Carolina. There’s a hypothesis that those who have left Florida for Georgia and North Carolina have done so to avoid hurricanes and big insurance premium jumps.”
One cause for concern is changes being made to flood insurance. The Federal Emergency Management Agency (FEMA) plans to implement risk-based pricing in 2020. This would change from the current system used by the National Flood Insurance Policy (NFIP), which depends on flood maps that are often outdated.
The reason for the transition? To offer a “more accurate assessment of risk,” according to FEMA. The NFIP is currently billions of dollars in debt. It unsustainably pays out more than it takes in each year. Many are concerned this means higher rates for those living in coastal areas.
“Before we sound an alarm, it is best to wait and see what Congress does, while being aware of the potential increases,” says Ellsworth Buck, Vice President of GreatFlorida Insurance, Florida’s top independent homeowners insurance company.
Current funding for NFIP expires on May 31, 2019. Legislators have until then to reach an agreement and find a permanent solution for the program or else pass another temporary funding extension.