You always get more of what you subsidize, especially risky behavior. That’s certainly the case along Texas’ hurricane-prone coastline. 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, “Never 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 dilemma comes in the form of the Texas Windstorm Insurance Association, a creation of the state.
“Unfortunately, rather than acting as a backstop for those who can’t otherwise find insurance, the association has almost become the default provider along the coast, resulting in a dramatic increase in policyholders and exposure†for taxpayers.
It’s no wonder more people are willing to move into “risky†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.
