I guess the insrance companies should give some of their profits back for auto & fire claims that have occurred as well. Why do you think that so many agents don’t write flood insurance? Because dealing with the government is a pain in the rear!!!! Let flood insurace become privatized. I bet you wouldn’t have near the problems….Oh yeah, don’t live in the rivers!
Agents get 18%-22% commission to sell flood policies. The WYO company gets 30% as the article states. The gov’t has to pay at least 80 employees to oversee the program (assuming that is all the employees). When there is a devastating flood, property owners who don’t carry flood insurance start whining and the gov’t gives them grants and loans from the pool of premiums remaining. Isn’t it a surprise to us all that FEMA is in the hole???
Privatizing flood insurance will eventually force homeowners to move away from flood prone areas or not build there at all. It will take decades to reduce the flood risk to a reasonable level that can be pooled with other perils such as fire, theft, EQ, …. The private properties that are ‘abandoned’ can be bought by the municipalities and used for parks, trails, or commercial buildings constructed to be flood proof /resistant. Three things are certain in life; death, taxes, and government inefficiency in running any type of business (especially those that take on risks).
Another example of a typical mismanaged government program. The bureaucrats don’t care – after all, it is taxpayer money (which in their minds is bottomless)and the taxpayers have to cover the losses – so just toss more taxpayer money at the problem.
When you mix government money with private administration of it, you get a classic case of what economists call “Rent Seeking”.
WYO is a textbook example.
Your first mistake is using the term ‘government money’. It is The People’s money, or more correctly, The Taxpayer’s money.
Your second mistake is assuming the administration is purely private. The government writes the rules and the private insurance industry carries out the steps the insure risks and pay claims. Neither party is exclusively in control of the administration.
I guess the insrance companies should give some of their profits back for auto & fire claims that have occurred as well. Why do you think that so many agents don’t write flood insurance? Because dealing with the government is a pain in the rear!!!! Let flood insurace become privatized. I bet you wouldn’t have near the problems….Oh yeah, don’t live in the rivers!
Agents get 18%-22% commission to sell flood policies. The WYO company gets 30% as the article states. The gov’t has to pay at least 80 employees to oversee the program (assuming that is all the employees). When there is a devastating flood, property owners who don’t carry flood insurance start whining and the gov’t gives them grants and loans from the pool of premiums remaining. Isn’t it a surprise to us all that FEMA is in the hole???
Privatizing flood insurance will eventually force homeowners to move away from flood prone areas or not build there at all. It will take decades to reduce the flood risk to a reasonable level that can be pooled with other perils such as fire, theft, EQ, …. The private properties that are ‘abandoned’ can be bought by the municipalities and used for parks, trails, or commercial buildings constructed to be flood proof /resistant. Three things are certain in life; death, taxes, and government inefficiency in running any type of business (especially those that take on risks).
Another example of a typical mismanaged government program. The bureaucrats don’t care – after all, it is taxpayer money (which in their minds is bottomless)and the taxpayers have to cover the losses – so just toss more taxpayer money at the problem.
Even at 30% profit, WYO carriers are dropping like flies.
When you mix government money with private administration of it, you get a classic case of what economists call “Rent Seeking”.
WYO is a textbook example.
Your first mistake is using the term ‘government money’. It is The People’s money, or more correctly, The Taxpayer’s money.
Your second mistake is assuming the administration is purely private. The government writes the rules and the private insurance industry carries out the steps the insure risks and pay claims. Neither party is exclusively in control of the administration.