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http://www.post-gazette.com/pg/06082/675468.stm...In Massachusetts some homeowners already are paying higher premiums as insurers abandon certain local markets. While the state hasn't experienced a devastating hurricane in more than 50 years, insurance companies, including Andover Cos. and Hingham Mutual Group, increasingly are refusing to write homeowners' policies on Cape Cod and on the islands of Nantucket and Martha's Vineyard, where many of the East Coast elite keep vacation homes. That has driven many homeowners into the state's insurer of last resort, the Massachusetts Property Insurance Underwriting Association, also known as the FAIR plan.
...Other states barely touched by last summer's hurricanes also are feeling the impact. In New York, Allstate, the largest insurer in the state, recently announced it would drop 28,000 policyholders in eight counties, including New York City, citing "overexposure" to potential weather related losses there. But other insurers, including State Farm and Liberty Mutual Group, have said they would continue writing business in the state.
In Rhode Island, insurers are beginning to alert homeowners in coastal areas that their policies won't be renewed, according to the state's association of independent insurance agents. [continued]
It strikes me that we might see a great deal of wealth simply evaporate. If in areas once prized for their millions+ dollar homes, the land is suddenly considered too risky to insure, then the wealth simply disappears? This seems potentially significant since many coastal areas are painted with expensive homes and land.
I have often wondered how long the homes along the Pacific Coast Highway, around Malibu, California, will stand. Sooner or later these tremendously expensive homes seem destined to wash out, burn out, or slide in the mud.
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