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Unstable Homeowners Insurance
The market for homeowners insurance is unstable, according to the industry source Insurance Journal. The largest insurer in California, State Farm, made headlines May 26 when it announced it would stop selling new homeowners policies in the state. Meanwhile, Florida’s insurer of last resort, Citizens Property Insurance Corporation, is on track to do more business in 2023 than it has in the last two decades because policies cannot be found elsewhere. The insurance arm of AAA said it will not renew “higher exposure” home policies in Florida, while Farmers Insurance Group will simply stop offering policies in the state.
Does this matter to homeowners not in those high-risk states? Yes. As state insurance regulators respond to political pressures and work to prevent insurance companies from adequately pricing homeowner policies in relations to actual risk, insurers cut back where they will offer policies and, according to economist Benjamin Keys, the Rowan Family Foundation Professor of Real Estate and Finance at the University of Pennsylvania’s Wharton School, they raise prices where they can.
Nationwide home insurance premiums have risen 21% since 2015, with Florida policies up an average of over 50%. What it takes is that one big disaster that a state’s insurance industry cannot fully recover from to lead to limited availability of policies and dramatic premium increases. It happened in Florida after Hurricane Andrew and in Louisiana after Hurricane Katrina, but we are no longer just talking history.
Insurers are turning to climate models to assess risk, factoring in what State Farm calls “rapidly growing catastrophe exposure.” They also are reacting to “historic increases in construction costs outpacing inflation.” One side effect of this chaos is a rising role for the state similar to what happened in the late 1960s when insurance companies backed away from insuring flood damage, giving rise to the National Flood Insurance Program.
Ørsted posted a $100 million escrow guaranteeing that the company will have Ocean Wind I fully operational by the end of 2025. Just two months prior Ørsted had announced that Ocean Wind I would not be completed until 2026. The company also said then that it had not yet made a “final investment decision,” a move some characterized as an attempt to extort more tax credits.
In Cape May County, the opposition to all offshore wind projects off the county’s coast continued with a cairn lighting protest at Cape May’s Cove Beach. Cairn lighting was historical practice used by the Norse to warn sailors away from danger before the use of lighthouses. In Cape May, flames were replaced with electric lights but the symbolism of the cairn as a warning was not lost. Speaking at the event, U.S. Rep. Jeff Van Drew (R-2nd) expressed the theme of the protest: A call to halt the development of offshore wind farms.
With climate change the acknowledged reason for New Jersey’s aggressive push into renewable energy, Mother Nature also made her presence known. Scientists said 2023 would likely be the hottest year on record. As of Oct. 10, reports are that the daily average Northern Hemisphere temperature had been at a record high for 100 consecutive days. While it may not have seemed record setting in Cape May County, the global heat wave had scientists worrying that their climate models were running behind events.
Demographics of School Districts
Data reported by the Education Law Center focused on the pandemic-induced Elementary and Secondary School Emergency Relief Funds whose deadline for being committed and spent is quickly approaching in 2024. But the data also presented a perspective on the very different demographics in Cape May County public school districts.
According to the National Center for Education Statistics, the percentage of students who are eligible for the free or reduced price lunch program “can provide a substitute measure for the concentration of low-income students in the school.” If so, what the number suggests about the concentration of low-income students in county school districts will probably not surprise too many residents.
The two Seven Mile Island communities of Avalon and Stone Harbor have 0% of students who qualify for the lunch program. At the other end of the scale, Wildwood, according to the Education Law Center data, has 83% of its students who qualify. Two other districts, North Wildwood (56%) and Lower Township Elementary (52%), have over half of the students who qualify. The median sits between Dennis Township’s 28% and Wildwood Crest’s 34% or at about one out of three students, meaning half of the county’s school districts have more than one in three students who qualify.
Cape May County has 16 operational public school districts, 13 of which are municipal, two are county, and one is regional.
Sea Isle City is still in negotiations with the state comptroller over approval for its community center plans. The city will advertise for bids as soon as that approval is secured.
A sizable majority of the state’s residents voted in favor of legalized cannabis but many do not want to smell it. Now a new poll shows many across the state object to the odor of marijuana in public places.
A 61-year-old female bicyclist in Stone Harbor who was not wearing a helmet required medevac to a trauma center after a collision with a parked car’s opening door.
Avalon will not join with those municipalities fleeing the State Health Benefits Plan following significant premium increases. The borough will stay with the program and absorb some of the risk and cost of higher deductible state plans through self-insurance.
Repairs are underway to the balconies in the Sea Isle City Spinnaker condominiums. A collapsed balcony resulted in the death of a contract worker in February.
Two state agencies provided presentations on related projects dealing with Wildwood landfill restoration and the dredging of state bay channels.
A Crest woman has maintained her sense of humor and a positive outlook on life despite an accumulation of tragic events.
Stone Harbor’s zoning official made a presentation to clarify the borough’s elevation requirements while the governing body works to alter ordinance language.
Construction has begun on the long-awaited Sea Isle City dog park. The goal is that dogs will have a place of their own by the time they are again banned from the beaches and the Promenade next summer.
The south Ocean City, Strathmere and Sea Isle City beach replenishment project is on pause while the Army Corps of Engineers deals with contractor bids that were all above Corps estimated costs.
Cape May in 2024 will join the ranks of other county towns that have raised their beach tag fees as those municipalities deal with the rising costs of maintaining and staffing the beaches.
An Ocean City psychotherapist was indicted again for making unauthorized transactions with client credit cards after she entered into a pretrial intervention program for similar offenses.
The 26th Street site of Avalon’s old school and library has been cleared and the borough plans to use the lot for parking.
County commissioners voted to lease the Crest Haven Nursing Home to a private for-profit company beginning Jan. 1, 2024. The county says it cannot continue to absorb annual deficits at the facility.
Spout Off of the Week
Middle Township – I love that LCMR has the senior athletes choose a teacher/coach that helped them along their way. It shows it takes the development of the whole student, not just the athlete. I hope other school districts and athletic directors do similar.
Read more spouts at spoutoff.capemaycountyherald.com.