Here’s What the House Has in Mind for Revamping Flood Insurance Program

By | May 26, 2017

  • May 26, 2017 at 9:15 am
    PolarBeaRepeal says:
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    This is an excellent article that covers the current activity of NFIP legislation in a comprehensive manner. It’s well organized and detailed enough to gain a good understanding of how Cassidy-Gillibrand have attempted to fix current problems and better administer NFIP for the near future.

    That said, I’d like to add my opinions on the issues covered and not covered therein.

    The Mapping section is a necessary part of the current NFIP revisions that use current technology and tools to improve rate adequacy, surcharge fairness, and solvency of NFIP. However, the ‘map appeals’ section ends with a pear of typoes that our difikult to undastand. Please decipher the last sentence, Mr. Simpson.

    The Surcharges section lists some common sense changes that will strengthen solvency and rate adequacy. However, the spreading of the surcharges needed to offset the credits for lower income owners of private residential dwellings to all other risks in the community leaves the door open for adverse selection if the credits are not properly monitored and administered. The possibly high level of surcharges required to balance overall state rate levels may be excessive for the ‘all other’ risks who are able to pay full premiums.

    Surcharges should normally only be applied for inappropriate risk behavior when it is under the control of the risk, to encourage loss mitigation. So, these surcharges to preserve rate adequacy may not be properly calibrated in specific cases, and the Cassidy-Gillibrand legislation should be reviewed to see if it anticipates potential adverse selection or other rate level inequities.

    I wish for once that politicians had the courage to enact legislation that initiates proper, full risk mitigation by gradual egress from flood plains by private owners, replaced by state/town-owned parks, or commercial warehouses that have flood resistant features, such as vacant first levels, etc. This would take several decades, but is in line with current transportation capability, unlike prior centuries when water travel by settlers in the US was very common, and resulted in dwellings and other buildings (too) close to waterways. It’s the 21st Century! Wake up Washington! The People are going to drain the DC Swamp of anyone who doesn’t want to /can’t use forward thinking to solve problems.

    (Polar Bear steps down from soapbox, and returns to iceberg for daily commute.)

    • May 26, 2017 at 11:32 am
      UW says:
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      The confusing part was probably intended to read, “[…] who want their maps updated.”

      Spell check is no alternative for editing.

    • May 26, 2017 at 2:01 pm
      Bill Price says:
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      PBR:
      Regarding Mapping,
      – The NC Coastal Resources Commission asserted that historical Sea Level Rise for NE NC has been 15″/100 yrs, but new NFIP funded LiDAR mapping has removed nearly 70% of Structures from Base Flood Elevations in Dare Co.. How can this be?
      – Extensive Publicity re. SLR Sewell’s Point, Norfolk proclaims rapid Sea Level Rise, but VA Dept of Environment, attributes Subsidence , not Sea Level Rise. What’s the Truth?
      Also of note- A recent NOAA Graph of 420,000 yrs of climate trends was published backward, supposedly evidencing CO2 driven GW; however, a reversed (corrected) view disproves CO2 forcing GW. Who can you trust?
      It seems that AGW and ASLR issues have become so politicized, and the reporting is so superficial, that the pols and public have no idea what’s up or down.
      Bill Price

      • May 26, 2017 at 3:01 pm
        PolarBeaRepeal says:
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        Write letters to the various parties you mentioned and ask them to reconcile the discrepancies you listed. That’ll keep ’em busy for a while.

        • May 26, 2017 at 6:08 pm
          Bill Price says:
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          I have.
          – The CRC refuses to answer questions.
          – Flood mapping officials in a Official meeting in Ral, did not know that locations proposed for withdrawal from Base Flood Levels, had repeatedly Flooded.
          – Flood Mapping Officials said there wasn’t enough elevation data to determine historical High Waters, even though every Flood Claim has elevation data.
          Scientists and Officials don’t like to be questioned, and, in fact, they will not answer questions in writing or in public.
          A quandary.
          BP

        • May 30, 2017 at 10:40 am
          PolarBeaRepeal says:
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          Send a letter to them stating the above, and copy it to local newspapers, TV news depts., etc.; i.e. hold them accountable, publicly.

          • June 1, 2017 at 11:59 am
            Bill Price says:
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            I have tried.
            Even got our Local County Commissioners to ask the questions. They got responses, but not answers. Major Metro papers will NOT print any LLTE that questions the scientists. Commissioners currently challenging New ” Inaccurate” flood maps.
            Very discouraging.
            BP

  • May 26, 2017 at 1:21 pm
    Jack says:
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    It will never be fixed and the debt will never be paid…Let it be said.

  • May 26, 2017 at 1:25 pm
    Jack says:
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    The program will continue to be a reflection of governments failure to do anything with competence.

    That’s why you should be buying your flood coverage from the private markets already.

    • May 26, 2017 at 2:53 pm
      PolarBeaRepeal says:
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      I’m in agreement with you, 100%. IMO, the NFIP can be phased out in a matter of a decade or two IF risk mitigation legislation occurs at local levels, so exposures are eliminated as dwellings in flood zones are abandoned – with local govt purchase of the dwellings for sale to commercial enterprises or for use as parks / open space. Perhaps a complete abandonment will take a half century? The phase-out can occur if the private insurance industry can take on the decreasing, residual exposures at adequate rates, using risk sharing with the insureds and reinsurers of various types.

      • June 1, 2017 at 12:07 pm
        Bill Price says:
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        First couple of projects I did (early ’70s) before Flood ins.
        I build way back, never any claims.
        After NFIP, people built closer to ocean and higher risk.
        NC is said to be positive Rev vs Claims.
        But when NFIP paid to rebuild under sea level in New Orleans , and folks still don’t have to have Flood Ins., and the Insured’s folks are being hit up for the Losses in NFIP, that’s just flat wrong.
        BP

    • May 26, 2017 at 3:08 pm
      Agent says:
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      Jack, those write your own markets are trouble to deal with too. Those elevation certificates are expensive to the property owner and that is just to get the coverage written.

  • May 26, 2017 at 1:41 pm
    Bill Price says:
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    Two Problems:
    1) 2012 GAO could not determine the Surplus or Deficit of NFIP.
    2) Indications are that claims for many “uninsured” Katrina, Sandy and other riverine losses were paid by NFIP.
    If Congress can’t even get a valid Comprehensive Financial Statement of the program, Not much hope for viable public policy.
    BP

    • May 26, 2017 at 2:55 pm
      PolarBeaRepeal says:
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      All the more reason for the peril to be covered privately, with the help of reinsurers / financial mkts issuing ILSs / cat bonds.

  • May 26, 2017 at 1:44 pm
    Jack Kanauph says:
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    They should stop giving money away after floods to those who failed to purchase flood insurance and had a loss.

    • May 26, 2017 at 3:10 pm
      Agent says:
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      Remember when FEMA was down in New Orleans handing out $2,000 checks to the victims that never heard of Flood Insurance or even insurance of any kind? They didn’t need no insurance because they knew the government would help them anyway.

    • May 26, 2017 at 5:46 pm
      Bill Price says:
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      Not only did Uninsured in New Orleans living below SL get paid, they rebuilt below SL and still don’t have Insurance.
      I expect it will happen again.
      BP

  • May 26, 2017 at 3:39 pm
    Tony says:
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    As a former NFIP General Adjuster and current flood program manager for a major ia firm I have been working with both congress and the senate to pass the  Cassidy-Gillibrand legislation. This legislation has all the elements needed to make the proper changes to the program while also encouraging Private Market to get more involved. but in order to do so we must work to keep in section 403 of the bill so that both markets have the same advantage to get prior loss information as well as actuarial info etc. This is the only way both markets can operate.

    • May 26, 2017 at 10:25 pm
      PolarBeaRepeal says:
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      Keep up the good work!

      I was involved in a volunteer pamphlet writing project in 2005, and again, to update it two years ago in 2015, to help consumers find property coverages such as NFIP. I hoped there would be greater push to mitigate the risk by evacuating the more frequently flooded zones over time. The short-sighted Congress only seems to want to continue the NFIP. At least there is some progress lately in WYO and other forms of private insurance markets for flood.

    • May 26, 2017 at 11:35 pm
      Sandy Advocate says:
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      Our non profit has been working DIRECTLY for 4 yrs with Sen Gillibrand on Sandy issues, Fema/NFIP issues, grant program thru HUD and reauthorization, where theres been some say in this. We still have plenty NOT paid from NFIP Sandy claims re-reviews that started 2 yrs ago that was only suppose to be 90 days, than 6 months, etc. All severely under paid, still unaddressed, not worth the $1000 – $2600 a yr some paid for decades for the damages occurred and NOT RL or SRL, “first timers”. this also happened in Hurricane Isabel in 2003. I can tell you first hand theres flooding that goes on now (Baton Rogue, SC, LI in 2014)that comes strictly from more occurring rain events. In LI in 2014 it rained over 13 in, coastal areas didn’t flood but inland did, causing $22m worth of damage. that was never picked up by Fema. Since Sandy theres been 8 BILLION worth of damage from non hurricane events and statically 20% ( I believe that number has gone up) of flooding is NOT in a flood zone. In Irene, in LI many inland had basement flooding again inland. We support a national disaster policy that modifies other perils across the country via homeowners ins, which would support all those since Sandy (many not even monetized in that $8 billion)that got flooded but had little to no support since Sandy CDBG-DR.

  • May 30, 2017 at 9:16 am
    Dave says:
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    “Risk transfer requirement. Require FEMA to use risk transfer tools, such as reinsurance, catastrophe bonds, collateralized reinsurance, resilience bonds, and other insurance-linked securities, to reduce direct taxpayer exposure to insurance losses. (FEMA has already begun buying reinsurance.)”

    You know the best way to reduce direct taxpayer exposure to insurance losses? Get the Feds out of the Flood Insurance business.

  • May 30, 2017 at 10:37 am
    Jon says:
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    Not sure I agree with putting a ceiling on the max premium of any one flood policy. It will most likely increase the amount of premium to the less expensive flood policy owners to offset the risk.

  • June 13, 2017 at 11:35 am
    Cheryl Kelly says:
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    There is a saying “You can run but can’t hide”, yes flood is an issue but so are tornados, wildfires, earth quakes etc. We will always have issues with all of these catastrophes and the government will end up paying in some form. The planet is a living planet and will always be in change whether we aggravate it or not. There will be violent natural trends as well as calm periods. If they cannot pinpoint where a hurricane will make landfall days before it hits in the Gulf of Mexico how can they say what the climate change will be and the how high the water level rise? Maybe a National Catastrophe fund that ALL property owners in the US would have to contribute if they wish to get help from the government to pay their losses like the flood program. Put caps on the building and contents like the current program and run the program WITH NO WASTE or LITTLE WASTE could be the answer. The impossible dream! Everyone could contribute and the premiums would be very affordable. Invest the money wisely to build up policy reserves or purchase reinsurance instead of just taking money out of the treasury. If you relocate from the coast, move from tornado ally or get away from the faults and wildfires you could just be going into a different catastrophe as many people have in the past. Build high in the areas needed, build fireproof in the areas needed, etc. etc. Let’s face it, catastrophes stimulate the economy and isn’t that part of the total picture too?



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