The ESG Initiative at the Wharton School
Senate committee investigating Florida’s state-backed home insurance company as private insurers flee
Outlet: CNN Business
The US Senate Budget Committee is launching an investigation into whether Florida’s state-backed home and property insurance company has enough money in the bank to withstand future disasters, as scientists warn warming oceans and sea level rise are making storms more destructive.
Fears about a possible federal bailout are not unfounded, Benjamin Keys, a real estate professor at the Wharton School of the University of Pennsylvania, told CNN.
“They absolutely have a reason to be concerned; the exposure is enormous,” Keys said. “1.3 million of the riskiest policies in the riskiest state, full stop. It’s correlated exposure – if a hurricane hits your house, it hits my house.”
Keys said the Senate Budget Committee’s investigation signals the federal government is trying to get in front of a future potential disaster – and the billions of damages it could bring.
“We know that in the event of a crisis, it’s very hard for the federal government to withhold aid and support,” Keys said. “It’s not a good look.”