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"Building and floodplain zoning is something we're all going to have to do," says Foy, who charges some clients up to $10,000 a day. "Insurance companies are going to make us do it." Foy says the reinsurance firms are "increasingly engaged about sea-level rises" that affect risk. He and Doctoroff were unaware that New York's state insurance department held hearings a year ago about the retreat by Allstate and other home insurers from the Long Island and Brooklyn markets.
But Doctoroff insists that the non-renewals in the city are largely limited to one- and two-family homes on the Rockaways, which he contrasts with the large, concrete, and thus insurable coastal projects that the city is encouraging. In fact, a half-dozen insurers are bailing on one- and two-family homes as inland as Midwood, and Foy says that insurance is already "a big concern for all properties" in parts of Florida and elsewhere, whether made of concrete or not.
Allstate, which is the state's biggest home-owner insurer and was actively chasing new policies until last year, points to climate models as the rationale for its abrupt decision to reject premium income in an effort to reduce its concentrated downstate risk. "It's absolutely true that part of the reason we're doing this," says Allstate's Krista Conte, "is because of what the modelers and the scientists are saying about potential weather-related catastrophes." One modeling company servicing Allstate, AIR Worldwide, lists New York as the second- highest hurricane surge-and-flood risk. While the modelers equivocate about what's causing ocean warming (natural cycles or humans), Allstate actually put New York on its list of states where it has stopped writing new homeowners' policies, a list that includes Florida, Texas, Louisiana, and Mississippi. The chief economist for the Insurance Information Institute called these states "catastrophe-prone segments of the U.S."
With seven of the 10 worst hurricanes in history occurring in 2004 and 2005, Allstate's Brian Pozzi says that scientists are telling them that "this is not an anomaly; it's a harbinger of things to come." The insurers are not just concerned about hurricanes; they cite the nor'easter that hit the city in 1992 and, even as a milder winter storm, flooded tunnels and PATH lines. "The Atlantic Ocean is warmer, the winds are stronger, and you have had more and more coastal development," Pozzi told the state hearing.
Joe Case, spokesman for Nationwide, which does its modeling in-house and is also retreating from the local market, says, "The reality is that forecasters are predicting more catastrophic weather along the East Coast in the near term" so "we're doing the responsible thing." Peter McDonough, a spokesman for Protecting America and Protecting New York, an Allstate-inspired civic coalition led by former FEMA director James Lee Witt, says that "the real hot spots" now are the Midatlantic states and the New York area. "This isn't just about the occasional random mansion on the bluffs in the Hamptons," McDonough warns. "We are talking about wiping out entire sections of society."
Strangely, the Bloomberg administration joined the coalition, even though the mayor said last year, while announcing his new evacuation plan, that "NYC is not a high-risk area for hurricanes," a good-news proclamation contradicted by tens of thousands of homeowner non-renewals and the risk avoidance of a half-dozen major insurers. Homeowners themselves increasingly understand the threat, with almost 10,000 more buying federal flood insurance than two years ago, a 35 percent increase.
The only private-sector advice this CEO-led administration appears to reject is the jittery modeling of the insurance industry. As much time and resources as Doctoroff and team are investing in sustainability, Aggarwala stresses that any climate-tied adaptation strategies "can't be imposed" and can only emerge after "engaging with New Yorkers on a community level," ostensibly starting with the real estate community. Asked to identify the single most important adaptation strategy that the city should pursue, top-drawer consultant Foy says: "I don't know the answer to that. It would be unwise to make dramatic, draconian changes now. What we should do is acknowledge that there could be severe storm and flood impacts."
And Dan Doctoroff, pressed about adaptation strategies in the cocktail swirl overlooking Central Park, took a pass. Rather than suggest any of his own, he turned the question back on a reporter. "What do you think we should do?"
A fair critique could begin at the start of 2004, however, when Cynthia Rosenzweig persuaded Bloomberg's then Department of Environmental Protection commissioner, Chris Ward, to launch a climate change initiative. Ward says the "initial concept was to get a mayoral office," staffed by DEP and cutting across a variety of agencies to focus on the impacts of warming. DEP was a logical choice for the job since its water supply, sewer, and wastewater systems are among the most vulnerable elements of the city's infrastructure, and since the mayor's existing Office of Environmental Coordination, headed by biologist Bob Kulikowski, reported to Ward already. DEP wrote memos to First Deputy Mayor Mark Shaw and Peter Madonia, the mayor's chief of staff, pushing the initiative.