With Fix for Flood Insurance Program Deficit Delayed, Now What?

By \ | March 26, 2014
flooding

  • March 26, 2014 at 1:22 pm
    Jay says:
    Like or Dislike:
    Thumb up 6
    Thumb down 0

    Now What? Wait 3 months, they will change their minds again……

    • March 31, 2014 at 4:12 pm
      jack says:
      Like or Dislike:
      Thumb up 0
      Thumb down 2

      Obuma was for it before he was against it….again.

  • March 26, 2014 at 2:12 pm
    Bill Price says:
    Like or Dislike:
    Thumb up 5
    Thumb down 1

    How do we Know?
    For over 3 years neither FEMA, NFIP, CRS, nor OMB would present a simple Bookkeeping overview of NFIP, and now Stop FEMA says 55% of Premiums were not used for Claims.
    Wonder where the Money went??????
    Bill Price USLA.US

  • March 26, 2014 at 3:02 pm
    Al says:
    Like or Dislike:
    Thumb up 3
    Thumb down 0

    Seems to me that a competitive private market would benefit all. Competition drives down price. Carriers could incentivize loss control measures with lower premiums. Unfortunately, the catastrophic nature of the losses would bankrupt most local and regional companies. As such a federal reinsurance program might be the best of both worlds.

    • March 27, 2014 at 10:01 am
      John says:
      Like or Dislike:
      Thumb up 3
      Thumb down 0

      Competition does not always drive down price. Look at the oil industry. They get together and dictate the market prices completely to keep them high. The insurance industry is the same.

  • March 26, 2014 at 4:45 pm
    Vox says:
    Like or Dislike:
    Thumb up 2
    Thumb down 0

    What now? Why, into the drink of course. Literally.

    • March 26, 2014 at 6:50 pm
      Bill Price says:
      Like or Dislike:
      Thumb up 3
      Thumb down 0

      SO you run your budget with no bookkeeping, and you will pay 54% extra for nothing?
      Good Luck.
      Bill

  • March 27, 2014 at 7:10 am
    Andrew says:
    Like or Dislike:
    Thumb up 6
    Thumb down 1

    Being that the flood requirement is not an insurance mandate but a mortgage industry mandate, I think they should require ALL lender backed properties should carry flood insurance. 20% of all claims come from X zones, so the risk is there. This would allow for proper funding, keep rates low, and allow the private markets to offer coverage and begin competition. Another option is to allow for a deductible up to $30,000. The average flood claim is around $27,000 for the past 10 years. If you put the average claim back on the homeowner then what are the insurance companies worried about. This option won’t be the best option for all, but ai can guarantee that if someone is paying in excess of $5,000 for flood premiums annually they would strongly consider this if they could drop their rates and premiums substantially. Just some thoughts…

  • March 27, 2014 at 10:40 am
    Leroy says:
    Like or Dislike:
    Thumb up 2
    Thumb down 0

    shift the risk to the capital markets. Pricing will be less than FEMA adjusted premiums since the demand is so strong for non-correlated reinsurance risk. Look at the MTA cat bond issued last summer. Insurers did not renew after Sandy so the MTA issued a cat bond at a low rate.

    • March 27, 2014 at 12:37 pm
      Libby says:
      Like or Dislike:
      Thumb up 4
      Thumb down 0

      What happens when the capital market goes under or runs out of money? Insurance needs to be regulated.

      • March 31, 2014 at 1:46 pm
        Leroy says:
        Like or Dislike:
        Thumb up 1
        Thumb down 0

        It’s simple supply and demand. You can question the same way about premium rates affecting the traditional reinsurance after a major hurricane hits Miami. Capital markets have a structural advantage over traditional reinsurers for peak risks given their lower cost of capital. FEMA should lock in cheap multi-year fully collateralized cat bonds or collateralized re now, while rates are to their advantage so they can start paying down their deficit.

  • March 27, 2014 at 12:36 pm
    Libby says:
    Like or Dislike:
    Thumb up 9
    Thumb down 0

    “I think they should require ALL lender backed properties should carry flood insurance.”

    I don’t disagree with you, but we’ve seen how well mandated health insurance has gone over in this country. But people don’t seem to have a problem with mandated auto insurance or workers compensation insurance. Funny.

    • March 31, 2014 at 10:21 am
      Whodathunkit? says:
      Like or Dislike:
      Thumb up 1
      Thumb down 0

      Your thinking too small. Mandate for everyone in a home or apartment regardless of financing. Bend the cost curve by spreading the risk as far as possible. Mandates don’t work?, just keep changing the program until it works, or sinks. We don’t learn from history, we just repeat and repeat.

      • March 31, 2014 at 1:11 pm
        Libby says:
        Like or Dislike:
        Thumb up 1
        Thumb down 0

        So you are for mandated health insurance? I could have sworn you were against it.

        • March 31, 2014 at 4:15 pm
          jack says:
          Like or Dislike:
          Thumb up 0
          Thumb down 2

          How about we mandate everybody pays for their own stuff, there’s a mandate I can live with. Your fair share ain’t in my pocket libtards!

          • March 31, 2014 at 4:45 pm
            Libby says:
            Like or Dislike:
            Thumb up 2
            Thumb down 0

            Why do you think you are subsidizing me? I might be subsidizing you with the amount of taxes I pay. No deductions for kids, higher tax rate. I could very well pay more than you into the “big pocket.”

            It’s funny, you republicants think you are the only ones that pay taxes.

          • April 1, 2014 at 8:46 am
            JACK says:
            Like or Dislike:
            Thumb up 0
            Thumb down 1

            I and most people (other than democrats) would be happy to give up the deductions for kids to get you democrats off the government nipple.

            1.NO you don’t pay more.
            2.I pay more than my fair share based on the definitions of “fair” and “share”. Look them up.

          • April 1, 2014 at 12:38 pm
            Libby says:
            Like or Dislike:
            Thumb up 1
            Thumb down 0

            I am not on the government nipple and never have been. If you have dependent children, I will bet I pay a higher percentage of tax than you do.

  • March 28, 2014 at 4:31 pm
    suebelka says:
    Like or Dislike:
    Thumb up 2
    Thumb down 2

    While the recent passing of HR. 3370 will slow the pain of insurance rate hikes for some, it is in no way the end of the battle for many of us. Second homeowners & businesses were left out of the law. Leaving us out, presents yet more problems for the economy. If we walk away or loose our homes, our neighborhoods loose all the tax dollars we contribute to the towns for services we hardly even use. I’ve been paying taxes for Schools, police & fire for 21 years! Then, add in the loss of summer rentals in tourist areas. My home alone has not been rented or used by our family, which cuts out all the monies that would have been spent to local restaurants, gas stations, food stores etc. I’m having trouble hanging on to a house I can’t use for pleasure or rent until I retire. I’ve also been paying flood insurance for 21 years – yes I am in a flood zone, but to pay more & get less on the first claim I ever filed is a real slap in the face ! Now, they want a high fee $250. on top of my premium. One common misbelief is that if you have a second home, you must be rich. We worked hard for what we have, now life has become a daily battle with our banks/FEMA. What I call “vultures” want to buy up our homes for pennies on the dollar acting like it’s a favor. A grassroots group that I strongly support, StopFemaNow has been a driving force in the changes that have recently taken place. I cannot understand why Second Homeowners should be treated any different than primary homeowners. For a country that preaches equal opportunity, enacts laws against discriminiation something is not right here! We need the politicians to realize that this can’t just be an over & done with deal. Too many people, still need so much help, we will not back down and our numbers are growing. JOIN StopFemaNow, there is “Power in Numbers” !

  • March 29, 2014 at 11:59 am
    John Bussom says:
    Like or Dislike:
    Thumb up 5
    Thumb down 0

    The Flood Insurance was not FIXED! The only thing this bill did was give Congress and Senators breathing room for elections by getting us off their back!

    One thing Biggert Waters 2012 did and again repeated with this last ACT was to DISCRIMINATE against 2nd homeowners and small businesses.

    Flood insurance premium rates are said to be based on RISK. How does WHO owns the property create a greater RISK? It does not and therefore a group is being targeted or better said DISCRIMINATED against paying higher rates than primary homeowners

    • March 31, 2014 at 10:26 am
      KY jw says:
      Like or Dislike:
      Thumb up 2
      Thumb down 0

      The “rate” isn’t based on WHO owns the property – the SUBSIDY is based on WHO owns the property.

  • March 31, 2014 at 9:27 am
    Don Golemme says:
    Like or Dislike:
    Thumb up 3
    Thumb down 0

    FEMA’s mission is “to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.”

    Their National Flood Insurance Program should not be a disaster relief fund and is clearly not simply a flood insurance policy.

    Funding for FEMA’s National Flood Insurance Program is derived from only two sources, both paid by flood insurance policy holders: Flood Insurance Premiums and Policy Fees.

    It is time for FEMA to get out of the Floodplain Management and Flood Mapping business and leave these projects to the U.S. Army Corps of Engineers.

    It is time for FEMA to terminate their flood-related grant program to States, Communities, or Tribal nations and give this responsibility to the HUD Disaster Relief Funds approved by Congress.

    It is time for FEMA to get out of the flood insurance business and let private insurers and re-insurers begin to issue flood risk coverage.

    Each State should have an insurance pool to which each insurer in the state must contribute. This assigned risk mechanism will protect those who cannot obtain flood insurance in the voluntary market. Assigned risk policies may have to be funded by surcharges to all policies so that the State can be the insurer of last resort.

    • March 31, 2014 at 1:13 pm
      Libby says:
      Like or Dislike:
      Thumb up 1
      Thumb down 0

      Are you suggesting a set-up similar to TRIA?

  • March 31, 2014 at 9:31 am
    Serafina says:
    Like or Dislike:
    Thumb up 3
    Thumb down 0

    FEMA’s National Flood Insurance Program should be modeled after California’s Earthquake Insurance Program, which has rates based on science, not profit, is not tied to government budgets, and provides peace-of-mind from knowing you can afford to repair, rebuild, or replace your covered property that may be damaged by the next catastrophic earthquake.

    California’s “earthquake insurance is costly, particularly in high-risk areas. For example, it would cost about $4,300 a year for earthquake insurance for a two-story wood-frame house in the San Francisco Bay area with an insured value of $750,000. That’s with a 10 percent deductible and $25,000 in contents coverage.

    The California Earthquake Authority (CEA) provides about 70 percent of the state’s earthquake insurance, which is sold through 16 participating insurers and the California FAIR plan (the state’s insurer of last resort for those who can’t obtain home insurance in the standard market). The policies include a standard 10 percent or 15 percent deductible; so, for a $400,000 house, a homeowner would have to pay for the first $40,000 to $60,000 in repairs.

    The CEA will begin market research to probe why consumers don’t buy earthquake insurance and whether a drop in premiums and deductibles would help. The CEA is supporting pending Congressional legislation that would enable it to lower premiums by 30 percent to 40 percent and cut deductibles by half. The proposals would allow the CEA to issue government-backed bonds in case of catastrophic losses that it was unable to cover.

    Currently the CEA covers that slim risk (about 0.5 percent to 1 percent) with reinsurance, which accounts for 40 percent of its costs, says authority CEO Glenn Pomeroy. If in the small likelihood the authority had to issue bonds, a small premium hike would then repay the bonds.”

  • March 31, 2014 at 11:41 am
    Sherinae says:
    Like or Dislike:
    Thumb up 1
    Thumb down 1

    If the changes to the flood program were so great and the people WHO own the properties is truly the basis of rate or even the flood hazard/mapping is the basis of rate, then why are extremely wealthy people who could actually afford the crazy high premiums for second homes(vacation homes on the coast) or the big condo and resort owners on the coast charges appropriately instead of having their properties remapped to a nonhazard zone when they are literally feet from the ocean? Please read article below. I read a similiar article a few months ago that told of a company that will solicit a new map to a lower rated area on your behalf and most of the time they get it. Money talks where reason is ignored, as always. This and other instances that are similiar are why there is no money in NFIP. I assure you the rates that are being paid in our area for flood hazard zones are tremendous. And the remapped twice in one year and included areas that have not flooded since such things were recorded (well over 100 yrs.) Just a new way to get more money for them to throw away later?

    http://www.nbcnews.com/#/news/investigations/fbi-investigates-fema-flood-map-changes-after-nbc-news-report-n62906

  • April 2, 2014 at 9:43 am
    LiveFree says:
    Like or Dislike:
    Thumb up 3
    Thumb down 0

    Subsidies don’t work. It’s simple economics. Gov’t subsidizes things bound to fail, they fail, hence the debt. The only fix is to stop them.

  • April 2, 2014 at 2:28 pm
    INSIDER says:
    Like or Dislike:
    Thumb up 3
    Thumb down 0

    The flood insurance program, is not in any sense an insurance program. Anyone who is in the biz, should know better than to call it that. What we do have is a political giveaway program, run by both the democrat and republican gangs{they stopped being parties awhile ago}.



Add a Comment

Your email address will not be published. Required fields are marked *

*

More News
More News Features