Caleb Nordquist
Hurricane Michael destroyed the east coast this past month, where the death toll reached 18 people and several homes and stores were ravaged. The total cost of damages hasn’t concluded yet however currently they are between $1.5 billion and $3 billion however they could possibly reach around $4.5 billion of deficits. Another 500,000 policyholders in Florida were impacted by the savage storm and power was eliminated in the states from Florida all the way to West Virginia. Although the disaster destroyed several million lives, people believe that insurance companies are benefiting from the hurricane because of the sole fact that they are making money based off of destructed buildings and homes. The southeast corner of the USA was the targeted and afflicted states and the damages resemble that.
As far as most people know, the hurricane isn’t officially concluded. There are still high wind speeds and massive flooding that is ensuring that whatever was there before the hurricane isn’t there afterwards. According to Brock Long, administor of the FEMA, “We're still in life-safety mode. We're not even close to having discussions on rebuilding yet." (CBS News). So according to Brock, most people are still bracing for the wind and water while they see their houses and towns all around them being ravaged. While the hurricane is still occurring, the president has sent out search-and-rescue teams to all the states that were hit by the hurricane. Hurricane Michael also caused destruction to Mexico, when over 250 people were evacuated from their homes and cities because of how serious the threat was. Due to the damages and deaths, the hurricane has seriously hurt the poverty rating in the states. Now that recovery will occur, most buildings and companies are in bits and pieces, causing the jobs to go under and people to live without their careers. With only $4.5 billion dollars in damage, compared to last year’s deadly hurricanes (Irma and Harvey) which crippled the US economy with $180 billion of damages, Hurricane Michael didn’t take as much of an economic decline as past hurricanes have. That doesn’t separate the fact that millions of people are still out of the job for the time being.
Considering all of the damages and all of the hazards that are present in the environment, the damages are fatal and brutal. However, the country as a whole won’t be as affected economically speaking. The destruction is horrific and the damages are in the billions, however compared to prior natural disasters, Hurricane Michael hasn’t costed as much. So, from an economic standpoint, the hurricane caused severe damage and massive payments, however it’s a penny to pay compared to how much Hurricane Harvey and Katrina costed in the past.
Works Cited
CBS/AP. “Michael's Death Toll Jumps as Crews Search for Survivors - Live Updates.” CBS News, CBS Interactive, 12 Oct. 2018, www.cbsnews.com/live-news/hurricane-michael-damage-florida-flooding-georgia-power-outage-weather-deaths-today-live-updates/.
“Hurricane Michael Death Toll Climbs to 18; Trump to Visit Florida, Georgia.” The Weather Channel, weather.com/storms/hurricane/news/2018-10-15-hurricane-michael-latest-impacts-florida-georgia.
“The Damage Costs From Hurricane Michael Could Top $4.5 Billion.” Fortune, fortune.com/2018/10/11/hurricane-michael-damages/.
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ReplyDeleteTheses hurricanes are a big deal to the states that are near the ocean and this hurricane has caused people a lot but not as much as the other hurricanes have. Theses hurricanes are costing the US economy a lot of money trying to help the people that have been hit by one.
ReplyDeleteI agree with your point that economically, the destruction doesn't cost as much as it did in the past. But also something else that can be factored in are the implicit costs of destruction. Especially for local businesses in Florida, the money that businesses could have made had they been still completely functioning. It truly does affect the lives of many people around the area and the implicit along with explicit costs are very big nonetheless compared to all the other hurricanes.
ReplyDeleteFirstly, in response to the hurricane, insurance companies could've raised their prices considerably, as there is the expectation of future hurricanes, meaning demand for insurance probably increased. Because of the mass evacuations and job losses as well, supply of goods and manufactured on the coast is probably down, as the resources to produce and not readily available. Also, since employment rates are majorly down, inferior goods will be demanded more. The income elasticity of those goods would be negative.
ReplyDeleteInsurance companies are making money because there is an increase in demand for these insurance companies allowing them to raise their prices. This could hurt us economically because citizens of Florida don't have enough money for everything that they need(house, food, car), that all could have been destroyed during the natural disaster. Many Florida citizens are reluctant to pay high prices for insurance when they can't. I do agree that this hurricane does not cost as much in the past with other hurricanes but we have to terminate these high insurance prices.
ReplyDeleteI did not know how much effect on the economy a hurricane had before coming into this reading so it was interesting so see how it was affected but I feel like you could go into supply and demand and talk about what prices went up and what services and resources where more in demand after the hurricane hit that way you can talk more about economy.
ReplyDeleteI agree with what Maria said about how the insurance companies could easily raise their prices. Raising their price would then also raise their revenue generated. The people in states that are most affected by natural disasters such as Hurricanes pay for insurance because of the likelihood given that a hurricane will occur. If prices go up the people will still purchase the insurance because it is a inelastic good, which means that people need it, and will pay for it even when the prices are on the higher side, in order for them to live comfortably.
ReplyDeleteAlthough hurricane Michael didn't make such a huge economic impact in terms of the cost of damage, it made large impacts in different ways. Many people no longer have homes as you have said and that is causing the United State's poverty rate to spike up. Also, the insurance companies are basically taking advantage of the people who's homes were destroyed. It seems that the insurance companies are worried more about their revenue rather than actually caring for and helping people in need.
ReplyDeleteEven though hurricane Michael was not one of the biggest damaging hurricanes to occur it still had an economic impact. It will cause local companies to suffer because of the destruction of local goods, this will cause small scale shortages on areas that relay on the areas damaged by hurricane Michael.
ReplyDeleteEven though it is thought that Hurricane Michael didn't effect the economy that much, the natural disaster actually did do a lot of damages to local business due to the fact that companies could not be making money while the hurricane occurred. The opportunity cost of the natural disaster is great due to the fact that employees and owners alike cannot make money while the store is partially destroyed which will cause families to not make money and will likely be forced to take out loans to help pay for daily living. Additionally, insurance prices would skyrocket and cause insurance to be much more expensive.
ReplyDeleteAs far as I'm aware, insurance companies take the hit when a natural disaster occurs because their accounting costs increase on the account of the companies actually having to bail out the victims; that's why they hire the actuaries to accurately predict the probability of an insurance company to pay out the claims. Really, a larger margin of properties on the east coast lack insurance because they have a price tag that's just too high. Doesn't really matter that much if you're retiring to Florida anyhow, and if you're in Wisconsin you probably won't need hurricane insurance. Carpetbaggery is a real concern, but there are laws that limit changes in gas and water prices in America; essentially crisis-scenario price ceilings, and if something like that does come out of this it'll be a national incident that gets met with a class action. Inferior goods are hot sellers due to the despair of the victims, so the economic impact of the crisis might be a little bit inflated because of the natural liquidation of many inferior goods from the market like toiletries, canned goods, and microwave ramen, and the insurance business is literally designed to absorb the losses of occurrences like hurricanes or fires; the money is exchanged on the back end instead of a massive annual destruction of the housing market every other autumn; insurance is second only to fractional reserve banking on greatest inventions since sliced bread.
ReplyDeleteI feel like you could talk more about the supply and demand of how everything effected the people with the prices of goods and services, while I do see the you talked about the large prices the hurricane costs us in billions, that was like your whole article.
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