You always get more of what you subsidize, especially risky behavior. That’s certainly the case along Texas’ hurricane-prone coastline.Â Our friends over at the Texas Public Policy Foundation recently published a sobering report looking at the multi-billion-dollar liability taxpayers are facing in the event of a major hurricane.
As the authors note, â€œNever before have so many people and so much personal property been at risk. While communities along the coast welcome the economic growth, it creates a dilemma for Texas policymakers.â€
That dilemmaÂ comes in the form of the Texas Windstorm Insurance Association, a creation of the state.
â€œUnfortunately, rather than acting as a backstop for those who canâ€™t otherwise find insurance, the association has almost become the default provider along the coast, resulting in a dramatic increase in policyholders and exposureâ€ for taxpayers.
Itâ€™s no wonder more people are willing to move into â€œriskyâ€ areas when they know the state and federal government will bail them out when a big one hits. That people find it hard to get low-cost insurance in hurricane-prone parts of the state should be a clue that the market sees such a move as risky. But government upends market wisdom and commonsense with taxpayer subsidies, and thereby puts life, property and wealth in danger.
The Foundation’s report offers a number of sound policy recommendations that lawmakers would be wise to heed… And taxpayers wise to demand.