Monday, October 03, 2005
Flood Insurance
The headline reads "Flood funds drying up fast, Federal program sliding into deficit." The National Flood Insurance program expects to be $20 Bil in the red b/c of hurricanes Katrina and Rita. Many of the homeowners in N.O. were not insured. Estimates at 40-70%! Too early to say for sure. Regular homeowners insurance doesn't cover flooding.
There is a proposal in congress to cover the properties that were not insured.
My first reaction to this was - no way - if you don't take the initial step to be insured properly, then you bare part of the responsibility of the consequences. If you receive no money from your home being flooded, then perhaps you will move to a less flood prone area. We can't continue to promote living in risky areas.
But, then I thought - what about the responsibility of the government to either:
a.) build adequate levees to protect an under sea level city. or
b.) offer incentives to move from the area - if flooded once, maybe not, but twice - buy the property - bulldoze it, and provide funds to have the person relocate to higher ground. (think about it, rebuilding the home would cost perhaps $1,000's more than just giving the person enough to have a down payment on a new home, especially in the case of severe flooding where the house is a total loss.
They say that one percent of covered properties have cost the program 38 percent of the claims since 1978, because they are repeatedly flooded. This is ludicrous. As I mention above - there should be a limit to the payout on a property. Say if it floods more than once in so many years, then offer incentives to move.
But, government is part of the issue here. They must do whatever they can to mitigate a known problem. If an area constantly floods, then they need to make a plan to either prevent or mitigate future flooding, or get people out of the areas. If it is deemed too expensive to protect an area - then they need to work on a program to move the city or warn the residents that it is too expensive to fix the problem - so we need another solution. Sorry about your luck.
One suggestion in the story was to revise the FEMA "100-year flood plain" to include more areas and thus require flood insurance for those properties - and thus boost revenue for the flood program.
The key to flood insurance is its affordability. But, with major catastrophes, the premiums don't cover the losses - especially this year. They can't raise the premiums more than 10 percent in a year per law. This is good consumer protection.
But, we have to be realistic - if we want to live in flood prone areas, then we should have to pay whatever it costs. If you don't like paying it, then move to a different location that isn't flood prone.
The only real beef I have is the one percent representing 38 percent of the cost. Good money after bad. Short-sidedness. If I wreck my car too many times, then what does a private insurance company do? They cancel my policy or raise my rates to go along with my incident rate. Harsh, but if I am more of a risk, then I should pay more and/or modify my driving behavior. Same with my home - if it floods two, three or more times, then either I need to move, or the city/county/state/fed govt needs to condemn the property or fix the issue.
now here or no where 8:40 AM | (0) comments |
There is a proposal in congress to cover the properties that were not insured.
My first reaction to this was - no way - if you don't take the initial step to be insured properly, then you bare part of the responsibility of the consequences. If you receive no money from your home being flooded, then perhaps you will move to a less flood prone area. We can't continue to promote living in risky areas.
But, then I thought - what about the responsibility of the government to either:
a.) build adequate levees to protect an under sea level city. or
b.) offer incentives to move from the area - if flooded once, maybe not, but twice - buy the property - bulldoze it, and provide funds to have the person relocate to higher ground. (think about it, rebuilding the home would cost perhaps $1,000's more than just giving the person enough to have a down payment on a new home, especially in the case of severe flooding where the house is a total loss.
They say that one percent of covered properties have cost the program 38 percent of the claims since 1978, because they are repeatedly flooded. This is ludicrous. As I mention above - there should be a limit to the payout on a property. Say if it floods more than once in so many years, then offer incentives to move.
But, government is part of the issue here. They must do whatever they can to mitigate a known problem. If an area constantly floods, then they need to make a plan to either prevent or mitigate future flooding, or get people out of the areas. If it is deemed too expensive to protect an area - then they need to work on a program to move the city or warn the residents that it is too expensive to fix the problem - so we need another solution. Sorry about your luck.
One suggestion in the story was to revise the FEMA "100-year flood plain" to include more areas and thus require flood insurance for those properties - and thus boost revenue for the flood program.
The key to flood insurance is its affordability. But, with major catastrophes, the premiums don't cover the losses - especially this year. They can't raise the premiums more than 10 percent in a year per law. This is good consumer protection.
But, we have to be realistic - if we want to live in flood prone areas, then we should have to pay whatever it costs. If you don't like paying it, then move to a different location that isn't flood prone.
The only real beef I have is the one percent representing 38 percent of the cost. Good money after bad. Short-sidedness. If I wreck my car too many times, then what does a private insurance company do? They cancel my policy or raise my rates to go along with my incident rate. Harsh, but if I am more of a risk, then I should pay more and/or modify my driving behavior. Same with my home - if it floods two, three or more times, then either I need to move, or the city/county/state/fed govt needs to condemn the property or fix the issue.
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