August 18, 2019

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The State of Insurance Following Hurricanes Harvey and Irma

Insurance Rates

In the wake of Hurricanes Harvey and Irma, residents in the affected regions will likely face years of hardship related to insurance coverage. How do we know this? Well, these aren’t the first hurricanes to sweep the nation. Not long ago, Hurricane Sandy took a bite out of New Jersey, leaving many local denizens to pick up the pieces. Supposedly, government agencies, namely FEMA, are supposed to aid people in paying for damages wrought by nature. Sadly, that agency is woefully mismanaged and poorly funded.

Just ask members of Stop FEMA Now, who a few months ago warned victims of Harvey and Irma of the imminent insurance crisis. They witnessed first-hand the impotence of underfunded government agencies.

HB 1774

In Texas, victims of Harvey will face even steeper odds of receiving compensation thanks to a law passed this year by the state legislature. HB 1774, the brain child of insurance industry lobbyists, places limitations on a Texan’s ability to sue insurance companies and significantly reduces penalties incurred by insurance companies when they are forced to pay damages.

Steve Mostyn, a trial lawyer in Houston, took on thousands of claims filed after Sandy struck in 2012. As a Houston resident, he has a thing or two to say about the status of insurance coverage in Texas.

Specifically, he noted in an interview the negative impact of HB 1774 on the average person: “When you lower the penalties […]  if you lower them down to almost nothing and make it difficult for people to hire lawyers, then the conduct will get worse, so it’s going to be more difficult to get paid for [storm-related claims] […] whatever length of rope you give the insurance companies […] they’ll run as far as they can run.”

High Costs

In addition, the costs related to Irma and Harvey are sky high. The damage to boats alone accounts for hundreds of millions of dollars. According to the Boat Owners Association of The United States, boat damage amounts to $655 million – that’s due to the almost 63,000 boats that were either destroyed or damaged during the hurricanes.

Overall, the numbers are staggering. According to an overview by CNN, Harvey incurred nearly $180 billion in damages, while Irma caused somewhere between $150 billion and $250 billion. As noted by Vox, these numbers are considerable from the point of view of GDP. In an economy worth $18.57 trillion, the damage dealt in those southern states could result in a 0.8 percent decrease in GDP growth.

Sad State of Insurance

As for the poor funding of government insurance agencies like FEMA and the National Flood Insurance Program (NFIP) – which FEMA oversees – the state-of-affairs is dire. As of 2014, FEMA was $24 billion in debt to the US Treasury. In addition, the agency has not repaid any money on the principal amount since 2010, according to a Government Accountability Office (GAO) report.

And since insurance stock prices have plummeted in the aftermath of the Hurricanes, it’s even less likely that insurance companies will pay the full amount on claims, as they are generally interested in maintaining profits. That’s not to mention that a large number of people don’t have flood insurance due to high costs. Only a sixth of all homes in Houston have some sort of coverage.

What to Do

In light of these hardships, if you are worried about insurance in the wake of Hurricanes Harvey and Irma, you should be sure to arm yourself against unscrupulous, profit-seeking insurance companies. Immediately following the event, be sure to document the aftermath in as detailed a manner as possible – that means taking a lot of pictures if possible. Remember, insurance adjusters are not incentivized to be forthright with regard to the value of your claim because they are more interested in profits than they are in people.

For this reason, don’t believe everything they say. They might tell you you’re not covered, or that the damage was your fault. Do not take them at their word. Instead, you might want to seek out the help of an attorney who understands these tactics and who is able to determine the amount owed to you. Having a lawyer can give you an advantage as you try to rebuild your home and your life.

About Sean Lally

Sean Lally holds a BA in Philosophy from Temple University where he also studied theatre for several years. Between 2007 and 2017, he worked as a professional actor for several regional theater companies in Philadelphia, including the Arden Theatre Co., EgoPo Productions, Lantern Theater and the Bearded Ladies. In 2010, Sean co-founded Found Theater Company, an avant-garde artist collective with whom he first started to cultivate an identity as a writer.

Over the past few years, Sean has been working as a content writer, focusing primarily on the ways in which unequal power distribution can negatively affect consumers, workers and “everyday people,” more broadly. He writes for a number of websites including,, and others.