Anticipating Hurricane Matthew, 4 States Declare Emergency

Rebounding to Category 4 hurricane classification, Matthew now has winds up to 140 miles per hour and has caused at least 28 deaths in three Caribbean countries. It is heading for the southeastern U.S., where four states—Florida, Georgia, South Carolina and North Carolina—have issued a state of emergency and evacuation orders in coastal regions.

Matthew was a Category 4 hurricane through Tuesday, was downgraded to a Category 3 early on Wednesday, and has now returned to Category 4 strength today, according to the U.S. National Hurricane Center (NHC).

Florida Gov. Rick Scott issued a warning on Thursday urging those in evacuation zones to leave immediately. “Based on the current forecast, the heights of storm surge will be above ground. Waves will be crashing on roofs. Homes will be destroyed,” he tweeted in both English and Spanish on Thursday morning.

“Time is up, Hurricane Matthew is approaching Florida. If you are in an evacuation zone, leave now,” he said in a statement. “To everyone on Florida’s east coast, if you are reluctant to evacuate, just think of all the people the hurricane has already killed.  You and your family could be among these numbers if you don’t take this seriously.”

Scott said that so far more than 4,000 National Guard members have been activated to help with evacuations and sheltering. He tweeted that as of 6:00 a.m., more than 3,000 people were in about 60 shelters. The state offers a mobile app to help those in flood-prone areas find the nearest shelter and also avoid traffic congestion.

A state of emergency has been declared by Georgia’s governor for 13 coastal counties. South Carolina’s governor declared a state of emergency and has begun coastal evacuations that may affect up to 1 million people. Because of heavy traffic, lane reversals on some highways are in effect, and schools and government offices in 25 South Carolina counties are closed today. North Carolina’s governor has declared a state of emergency for more than 50 counties and issued a mandatory evacuation order for Ocracoke Island, AIR Worldwide reported.

The Federal Emergency Management Agency (FEMA) has sent personnel and supplies to all four states, and President Obama is meeting with FEMA officials coordinating the response to Hurricane Matthew at the agency’s headquarters in Washington, D.C.

According to CoreLogic, a Category 3 storm hitting Miami could potentially damage 176,000 homes at a reconstruction cost value (RCV) of about $3.8 billion.

CoreLogic’s Storm Surge Risk Report estimates that more than 6.8 million homes located along the Gulf and Atlantic coasts are at risk of storm surge damage, with a total RCV of about $1.5 trillion.The length of coastline, coastal elevation and density of residential development all contribute to the risk of storm surge flooding.

According to CoreLogic, the total number and total value of residential properties for the four states currently bracing for Hurricane Matthew are:

Total Number and Total Value of Residential Properties by State

The Best and Worst States for Business, According to CEOs

For CEOs, who naturally favor “pro-growth,” low-tax states, southern states present an undeniable bastion for business, according to Chief Executive magazine’s 2015 “Best and Worst States for Business” survey.

In this year’s survey, Texas remained the best state for business for the 11th year in row, followed by Florida, North Carolina, Tennessee and Georgia. Since the recession began in December 2007, 1.2 million net jobs have been created in Texas, while 700,000 net jobs were created in the other 49 states combined, the magazine reported. This job creation contributed toward unemployment rates 1% lower than the national average, an advantage rounded out by extremely favorable taxation and regulation, strong workforce quality, and very good marks for living environment.

Despite notably low unemployment, two of the greatest hubs for business drew particularly unfavorable marks from CEOs: California ranked last in the survey, preceded by New York. Illinois, New Jersey and Massachusetts completed the bottom five. CEOs gave these states the lowest ratings because of their high tax rates and regulatory environments. One CEO told the magazine, “The good states ask what they can do for you; the bad states ask what they can get from you.”

Compared to the 2014 rankings, Idaho has made the largest improvement, rising 10 spots to number 18, primarily due to high growth rates in GDP, while South Dakota dropped eight places, “even though quality-of-life attractions enhance the state’s low-tax bona fides,” the magazine reported.

Check out the full rankings below:

Best States for Business rankings


The End of the Florida Workers Compensation System?

Workers Compensation Florida

A recent development in Florida has jumped that state to the front of the age old workers comp debate between employers and their workers. On August 13, Miami-Dade Circuit Judge Jorge Cueto declared the state’s workers’ compensation exclusive remedy statute (440.01 et seq.) unconstitutional on the grounds that the benefits given to injured employees by the law no longer provide a fair exchange for the surrender of an employee’s right to sue the employer for negligence damages. “The benefits in the act have been so decimated that it no longer provides a reasonable alternative,” said Judge Cueto.

For years, workers rights attorneys in Florida have been asking judges to strike down the Florida workers compensation law. They argue that successive state legislatures have continually eroded the benefits that injured employees receive under the workers comp system. Employers and some legislators counter that high workers comp insurance premiums have those changes necessary in order to stabilize the state’s economy.

For now, Judge Cueto’s ruling will not impact areas outside of Miami-Dade’s judicial circuit. Florida Attorney General Pam Bondi, who has received criticism for not directly intervening in the Miami-Dade case on behalf of the state, has filed an appeal to Judge Cueto for a rehearing. If that appeal is denied, as seems likely, then the case could eventually make its way to the Florida Supreme Court. Should the Supreme Court uphold Judge Cueto’s ruling then workers throughout the state will be able to settle their workers compensation claims, then file a civil claim to recover additional benefits.

This case will join other cases challenging parts of Florida’s workers comp statutes. The state Supreme Court is considering an appeal from an injured firefighter who was left with no income after his temporary wage-loss benefits expired.

Florida Looking for NFIP Alternatives

Last week, Florida Insurance Commissioner Kevin McCarty announced that his office is in the process of developing guidelines for insurance companies to request approval to write primary flood insurance in the state. This announcement came just one day after Rebecca Matthews, McCarty’s deputy chief of staff, told the Florida Senate Banking and Insurance Committee that the Florida Office of Insurance Regulation (FLOIR) was in talks with various insurance companies regarding writing primary flood coverage in the state. These developments are in response to continuing concerns about escalating flood insurance rates due to the Bigger-Waters Act of 2012.

The Biggert-Waters Act of 2012 extended the National Flood Insurance Program by several years while also putting in place several reforms meant to make the program more solvent. One of those reforms was a phasing in of actuarial flood insurance rates over time. For many the increased premium will be significant, if not severe. In Florida, the biggest hit will be to homes built prior to 1974 in high risk flood zones. At last week’s hearing it was reported that some of those homes could see rates rise from $500 to $16,000. Current owners of those properties will continue to receive subsidized rates, but those subsidies will discontinue once the property is sold thus hindering the Florida real estate market.

Florida officials hope that the private primary flood coverage can serve as a viable alternative to the NFIP by providing lower premium rates, but there are significant hurdles to overcome. Private insurers will likely be hesitant to cover properties that the federal government has deemed high risk and there are legitimate concerns about the lack of available data and information to properly underwrite the risk.

“The private sector has not written flood insurance because when you start a company you have to have a ‘me, too’ filing of something that already exists,” said Locke Burt, an owner of Security First Insurance. No such company currently exists in Florida.

Florida Rep. Bryan Nelson added that “the big problem we have is we don’t have enough information to base a decision on, and until we have expected-loss ratios, I don’t think the private sector is going to be ready to jump in.”

Another NFIP alternative being considered would be the creation of a Florida flood insurance pool. Sen. David Simmons, chairman of the Florida Senate Banking and Insurance Committee, signaled that this could be an option if the private market is unable to respond fast enough. The hope is that the pool could provide lower rates than the NFIP.

Florida officials also continue to push for delays in NFIP rate hikes. Gov. Rick Scott called on President Obama to halt the hikes. “The president signed the bill. He can have an impact by stopping this.”