See now this is a very interesting and under reported development. The simple fact that you have this massive appreciation in properties in coastal areas, you have many people whose entire financial net worth is tied up into these properties and YET there is no possible way they can insure their property for what the open market would pay for it at the moment.
So what happens when you have people who have a property that might be worth $1,000,000, yet the insurer will only insure for the amount to re-build? Or what happens with these people who have massive mortgages and if/when the property is wiped out by a natural disaster? The insurers clearly want nothing to do with this stuff anymore. Considering how many hurricanes blew thru Florida last year alone, do the people who just plow everything they have into these coastal properties even think about this stuff anymore? Is there any level of reason left?
Senor Zen