Stepping over the water line

Peter Grant takes umbrage at the current state of the federal flood-insurance program:

Let’s assume that Hurricane Irma will cost about the same as Hurricane Harvey in terms of insurance payouts. That’s $22 billion in total. Let’s assume, too, that the historical average holds, and that about 30% of those claims will be repeat claims from properties that had previously been damaged by flooding. That’s $6.6 billion. That money might as well be poured down the drain … because it’s merely repeating previous repairs. What’s more, if those properties are permitted to reinsure at subsidized rates, we — the taxpayers of America — will be on the hook yet again for future repairs, which are certain to arise when the next hurricane hits those properties.

Proposed solution:

The taxpayer-subsidized federal flood insurance program should be modified AT ONCE. Those who are presently insured under it should be able to keep their insurance … but for one future claim only. As soon as they make a flood-related claim, the payout should be in the form of a forced purchase of their property, and a razing of any and all buildings on it. The property owner(s) can use the payout to settle any outstanding debts on the properties, and apply the balance to buying or building another home in a less flood-prone area. We, the taxpayers of this country, should no longer be liable for any repeat claims on their former property — otherwise we’re subsidizing failure. We’re subsidizing the repair, cleanup and construction industries, as well as the property owners.

I also propose that any new or replacement construction in flood-prone areas, and any repairs to properties formerly covered by the federal flood insurance program, should be automatically denied access to that program. Those who build or rebuild in such areas should be forced to pay for insurance at commercial rates, which should not be subsidized by the rest of us. Why should we pay for damages that we know are almost certain to be incurred in future? Is that a proper use of our taxes? I maintain it’s not.

This is actually a bit milder than my own thinking, which runs along the same lines but does not allow for even a single additional claim. I would also be amenable to allowing private flood insurance, if you can find someone to write it. The premiums would presumably be higher, but hey, that’s what’s supposed to happen with increased risk.


  1. McG »

    19 September 2017 · 8:41 pm

    Either one sounds, to coin a phrase, fair.

  2. Holly H »

    20 September 2017 · 10:43 am

    Sounds good. The current system is unsustainable.

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