Flooding and no insurance coverage is about to become much more common in the Mississippi Gulf Coast. State Farm announced that it will not be renewing homeowners policies to those living within 1,000 feet of the beach and those between 1,000 and 2,500 feet will not be getting wind coverage renewed. Mike Chaney, the Mississippi Insurance Commissioner, is confident that people will be able to get coverage and states that rates may even decrease.

However, I am wondering, will it really decrease the rates. And will everyone be able to get covered? The real question is whether any other insurance companies will follow suit. If they do, basic economics tells us that the rates will go up. The less companies offering insurance to homeowners in that area, the less supply. People are unlikely to move at any significant number away from the area so demand will not substantially change. This will drive up the price. Also, if less companies are offering the insurance, the more risk they are taking on to pay out, so naturally the price would increase that homeowners pay for insurance. The fear of flooding without insurance coverage is well deserved for homeowners after Katrina, and with the recent developments up north in the Midwest.

Iowa, among several other Midwest states are suffering terrible flood damage due to heavy rains and levees, bridges, and dams breaking under the raising water levels. The flooding is moving south and breaking levees along the Mississippi. Flooding is all over the news, and if you are in the Midwest, it is everywhere.

This is especially vivid to me since I went to undergraduate at Coe College in Cedar Rapids, IA. It can be hard to really understand the devastation that occurs because flooding if you are not linked to the area. I remember the shock I felt seeing the aftermath of Katrina and the stories of the people affected. However, when Cedar Rapids came on CNN the first days of the flooding, I was in complete awe. Streets I had walked down and hung out at only a year ago were under water. Buildings I drove by daily were submerged to rooftops.

So many of my friends still live in Cedar Rapids, Iowa City, and Des Moines; I called so many people and stared at pictures they sent me. It is really surreal to see where you called home under water. Luckily, Cedar Rapids, like many other towns and cities, had begun earlier evacuations – many they felt were just for precaution but unlikely necessary – that helped reduce the death toll. Unfortunately, there were still deaths in the Midwest and homes and businesses were destroyed and/or damaged.

Erica Baasten
Summer Intern 2008
J.D. Candidate 2010
University of Colorado