Fans of This Old House remember Miami's O'Donnell house
as a Hurricane Andrew victim. The project had two problems
that can still be felt today: First, the insurance money
came nowhere near the repair costs; second, it came nowhere
near the O'Donnells.
Their
insurer was among eleven bankrupted by Andrew. Other companies
reacted by "reducing exposure" in the area. "We
had wholesale nonrenewals in Dade County," says Margot
Ammidown, director of the county preservation society, who
helped Steve and Norm select the O'Donnell house. Banks
wouldn't mortgage uninsured houses, she says, "but
you couldn't get coverage at any price."
The
uninsurance crisis is spreading nationwide as private insurers
back away from earthquake and storm zones. The Gulf and
Atlantic coasts, for example, together represent 3,700 miles
of jeopardy. Hurricane Hugo rang up $4.2 billion in damages
in 1989, followed by Andrew's $16 billion in 1992. And the
storm brewing in meteorologists' computer models-a once-
a-century catastrophe that would level vast stretches of
coast-just encourages further "shore-lining" by
insurers.
In Ocean Grove, New Jersey, Jean and Gilbert Stiles were
dropped by Royal Insurance after four decades. Like others
whose policies were not renewed, Gil Stiles learned "no
one would insure us, because we were too near the water."
Near means 1,000 feet, as Eva Moore discovered when seeking
a mortgage on Long Island last spring. Seeing a lake only
800 feet away, every company she called declined. Insurers
now fear the Midwest's little-known New Madrid Fault Zone,
where in 1812 a violent quake rerouted the Mississippi (while
ringing church bells in Boston and stopping clocks in Charleston,
South Carolina). The zone has hardly stirred since, but
underwriters, bruised by California's Northridge quake last
year ($11.7 billion), have ceased writing new policies,
dropped old ones or hiked premiums 80 percent on those they
kept.
