Amen, brother. This strikes me as classic Washington spin aimed at nothing more than a shell game. NFIP isn’t losing money just because of inefficiency or a lack of risk mitigation strategies. It’s a loser because it provides coverage at a significantly inadequate premium. Privatizing won’t likely result in a noticeable reduction in claims or risk, especially if limits are higher and coverage is richer. Rather, it would seem to guarantee the need for premium vouchers, carrier subsidies and/or NFIP “reinsurance” resulting in the same problem: taxpayer funding of insurance for these properties.
The gubment needs to get out of this program and not “gradually”. The sooner the better. It is still subsidized and it still encourages bad behavior. The sooner people bear the full costs and risks of living and building in “bad” places, the sooner they will stop doing it.
And somehow I am paying for this, right??? My suggestion is have the States engage in accurate flood zone mapping and let private insurance bill accordingly. The Federal Government should step aside except in the case of a CAT 4 or CAT 5 hurricane where a FEMA function is warranted. Areas of New Orleans below sea level should not have been rebuilt with Federal money. It should have been converted to parkland and funds used to relocate homeowners. Insurance and repairs for expensive shore homes on sand bars or on eroding cliffs should not be paid for by the middle class.
Respectfully, how do you feel about homeowners who are now in a 100-yr floodplain because of over-development (poor planning and greed on local government)?
Many of us in HTX are suffering because of an overdeveloped watershed and the city/county’s lack of LID standards. Texas does not fund flood-control infrastructure directly and it also does not have a statewide floodplain management plan. Why isn’t the state held responsible?
SRLs have accounted for just 1 percent of properties with National Flood Insurance Program policies but about 25-30 percent of flood claims, which cost the NFIP more than $12.5 billion nationally—equivalent to roughly half of the program’s $23 billion debt. Yet, according to FEMA data, 75 percent of repetitive loss properties have never gotten money or taken steps to reduce their flood risk, such as elevating the home. Mitigations such as these would go far to reduce SRLs. Severe repetitive loss (SRL) homes could be put into high-risk pools or qualify for elevation grants or buyouts (sometimes to be demolished and turned into detention ponds). Louisiana leads the nation in severe repetitive loss properties (SRL), with more than 7,200 multi-flood homes. Why isn’t the state doing more to improve infrastructure to prevent these losses?
Instead, I hear you blaming homeowners. Many people live in areas that were developed before flood mapping (pre-FIRM). Consider that we are unable to sell our homes because of increasing flood insurance premiums and/or because no one wants to live in a newly designated flood zone. Yet in many situations it is the city/county/state/federal negligence that has allowed this situation to worsen. Are we to lose everything because of failing infrastructure and over-development?
I agree, as do most, that vacation properties or coastal homes that are obvious risk, should not continue to be ‘subsidized.’ However nationally, over 25% of flood claims come from OUTSIDE floodplains. Most people outside a floodplain don’t have flood insurance, so if you think about it, those homeowners who weren’t prudent enough to have flood insurance anyway are also being subsidized without even having at least paid a premium. Are you equally frustrated by them?
Our annual premium began at $320 annually and is now $2300 for the very same coverage. Our home is not in the floodplain, but all of the back yard is. Of course, flood insurance covers nothing unless it is attached to the property which means we waste $2300 every year in order to pay flood damage for someone else. In the past 18 years, the backyard has flooded 2 times. I wish this law would expire, but I feel sure it won’t.
We started out almost 13 years ago now, in a 500 yr floodplain, no ins required. The second yr on our farm, that has two homes, we were required minimal flood ins. $350 yr per home, for the same coverage we currently have at the rate of over $2500 per house. in all those years we have filed one claim for $7000 for the worst flood year, they have more than gotten that back. Our deductible is $5000 per house too! We have tried to do our own ‘mitigation’ that first the county told us we could not do as we have a creek running through our property, but then we get a letter from FEMA saying we should be doing that! We have tried for nearly a year now to get anyone at our ‘regional’ FEMA office on the phone or any contact-to NO AVAIL!!! As someone else said you can’t really sell out now as your value is somewhat reduced by the added costs. We are a retired military family on a disability pension, fixed income that was more than enough for our home until finally paid for-our forever home! Now we may not be able to stay or sell and get enough out of it thanks to FEMA! Their flood maps are absolutely ridiculous and so is the policy that even though only one house in technically in the ‘high risk’ zone but the one that isn’t ‘touches’ a high risk and therefore becomes high risk for insurance purposes! Really?!! And their flood map shows it doesn’t flood directly in my creek but clear up the hill at my house it does! We can’t get any elevation cert’s out here as the ones done so far by county or state are so far away it would cost far too much and even if we did do one FEMA could just say that’s good but we are changing it again and you are still in it at high risk-our mortgage payment has gone up over $500 month!! Can anyone afford a bill like that added to your house payment just out of the blue-no one we know especially on fixed incomes! We have parents in other home / family not tenants! There has to be a better answer than this! Do people in the midwest pay for tornado insurance, how does that work? What happens if law expires? Will we get out from under this burden? I’ll take my chances with flooding since my whole house would have to float away before we will ever be able to have a claim with such deductibles!
@tawna righter – Have you looked into applying for a LOMC? Occasionally FEMA will change the zone for only the “structure” if it is found to be at a more favorable elevation than the parcel, as a whole, is. You can find additional info on FEMA’s website. I believe you can even apply online now. Follow the link for more info. (you might have to copy & paste it)
How does NFIP meet the definition of insurance, rather than merely welfare?
Doesn’t insurance require underwriting standards and rate adequacy?
$24.6 billion in debt would hardly seem to meet those requisites.
Has NFIP ever considered hiring an actuary?
Amen, brother. This strikes me as classic Washington spin aimed at nothing more than a shell game. NFIP isn’t losing money just because of inefficiency or a lack of risk mitigation strategies. It’s a loser because it provides coverage at a significantly inadequate premium. Privatizing won’t likely result in a noticeable reduction in claims or risk, especially if limits are higher and coverage is richer. Rather, it would seem to guarantee the need for premium vouchers, carrier subsidies and/or NFIP “reinsurance” resulting in the same problem: taxpayer funding of insurance for these properties.
The gubment needs to get out of this program and not “gradually”. The sooner the better. It is still subsidized and it still encourages bad behavior. The sooner people bear the full costs and risks of living and building in “bad” places, the sooner they will stop doing it.
And somehow I am paying for this, right??? My suggestion is have the States engage in accurate flood zone mapping and let private insurance bill accordingly. The Federal Government should step aside except in the case of a CAT 4 or CAT 5 hurricane where a FEMA function is warranted. Areas of New Orleans below sea level should not have been rebuilt with Federal money. It should have been converted to parkland and funds used to relocate homeowners. Insurance and repairs for expensive shore homes on sand bars or on eroding cliffs should not be paid for by the middle class.
Respectfully, how do you feel about homeowners who are now in a 100-yr floodplain because of over-development (poor planning and greed on local government)?
Many of us in HTX are suffering because of an overdeveloped watershed and the city/county’s lack of LID standards. Texas does not fund flood-control infrastructure directly and it also does not have a statewide floodplain management plan. Why isn’t the state held responsible?
SRLs have accounted for just 1 percent of properties with National Flood Insurance Program policies but about 25-30 percent of flood claims, which cost the NFIP more than $12.5 billion nationally—equivalent to roughly half of the program’s $23 billion debt. Yet, according to FEMA data, 75 percent of repetitive loss properties have never gotten money or taken steps to reduce their flood risk, such as elevating the home. Mitigations such as these would go far to reduce SRLs. Severe repetitive loss (SRL) homes could be put into high-risk pools or qualify for elevation grants or buyouts (sometimes to be demolished and turned into detention ponds). Louisiana leads the nation in severe repetitive loss properties (SRL), with more than 7,200 multi-flood homes. Why isn’t the state doing more to improve infrastructure to prevent these losses?
Instead, I hear you blaming homeowners. Many people live in areas that were developed before flood mapping (pre-FIRM). Consider that we are unable to sell our homes because of increasing flood insurance premiums and/or because no one wants to live in a newly designated flood zone. Yet in many situations it is the city/county/state/federal negligence that has allowed this situation to worsen. Are we to lose everything because of failing infrastructure and over-development?
I agree, as do most, that vacation properties or coastal homes that are obvious risk, should not continue to be ‘subsidized.’ However nationally, over 25% of flood claims come from OUTSIDE floodplains. Most people outside a floodplain don’t have flood insurance, so if you think about it, those homeowners who weren’t prudent enough to have flood insurance anyway are also being subsidized without even having at least paid a premium. Are you equally frustrated by them?
https://www.citylab.com/environment/2015/05/texas-is-paying-the-price-for-its-lack-of-flood-infrastructure/394115/
https://www.actuary.org/files/publications/FloodMonograph.04192017.pdf
http://www.pewtrusts.org/~/media/assets/2016/10/repeatedly_flooded_properties_cost_billions.pdf?la=en
https://e360.yale.edu/digest/thousands_of_us_homes_keep_flooding_and_being_rebuilt_fema_insurance_louisiana
Wonderful job on research! It is always appreciated when people take the time to educate themselves on the facts.
Our annual premium began at $320 annually and is now $2300 for the very same coverage. Our home is not in the floodplain, but all of the back yard is. Of course, flood insurance covers nothing unless it is attached to the property which means we waste $2300 every year in order to pay flood damage for someone else. In the past 18 years, the backyard has flooded 2 times. I wish this law would expire, but I feel sure it won’t.
We started out almost 13 years ago now, in a 500 yr floodplain, no ins required. The second yr on our farm, that has two homes, we were required minimal flood ins. $350 yr per home, for the same coverage we currently have at the rate of over $2500 per house. in all those years we have filed one claim for $7000 for the worst flood year, they have more than gotten that back. Our deductible is $5000 per house too! We have tried to do our own ‘mitigation’ that first the county told us we could not do as we have a creek running through our property, but then we get a letter from FEMA saying we should be doing that! We have tried for nearly a year now to get anyone at our ‘regional’ FEMA office on the phone or any contact-to NO AVAIL!!! As someone else said you can’t really sell out now as your value is somewhat reduced by the added costs. We are a retired military family on a disability pension, fixed income that was more than enough for our home until finally paid for-our forever home! Now we may not be able to stay or sell and get enough out of it thanks to FEMA! Their flood maps are absolutely ridiculous and so is the policy that even though only one house in technically in the ‘high risk’ zone but the one that isn’t ‘touches’ a high risk and therefore becomes high risk for insurance purposes! Really?!! And their flood map shows it doesn’t flood directly in my creek but clear up the hill at my house it does! We can’t get any elevation cert’s out here as the ones done so far by county or state are so far away it would cost far too much and even if we did do one FEMA could just say that’s good but we are changing it again and you are still in it at high risk-our mortgage payment has gone up over $500 month!! Can anyone afford a bill like that added to your house payment just out of the blue-no one we know especially on fixed incomes! We have parents in other home / family not tenants! There has to be a better answer than this! Do people in the midwest pay for tornado insurance, how does that work? What happens if law expires? Will we get out from under this burden? I’ll take my chances with flooding since my whole house would have to float away before we will ever be able to have a claim with such deductibles!
@tawna righter – Have you looked into applying for a LOMC? Occasionally FEMA will change the zone for only the “structure” if it is found to be at a more favorable elevation than the parcel, as a whole, is. You can find additional info on FEMA’s website. I believe you can even apply online now. Follow the link for more info. (you might have to copy & paste it)
https://www.fema.gov/media-library-data/a6176dcd224b6b2ae497fbb80ca57b20/Online_Letter_of_Map_Change_Flyer_FINAL.pdf