Why the Number of Coastal Homeowners with Flood Insurance Has Been Shrinking

By , and Meghan Hoyer | September 7, 2017

  • September 7, 2017 at 7:00 am
    PolarBeaRepeal says:
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    Someone without bear-like insight would assume the authors of this article are pointing to the lack of monitoring by banks / lenders of NFIP policies in force on mortgaged homes they own as the reason they allude to in the title. Not so.

    There could be a death spiral underway in the NFIP, unless Congress acts to mitigate the risks and local communities cooperate to prevent further construction of dwellings in flood zones. Needed increases in risk premiums based on expected, not insufficient, claim costs are driving the potential death spiral of decreased NFIP policies in force where the lower frequency /lesser severity risks are ‘self-insuring’ (i.e. ‘going bare’ rather than ‘going bear’).

    US taxpayers who subsidize people who lose their homes in floods because they went without insurance need to persuade Congress to make SIGNIFICANT reforms to NFIP, and enact federal legislation to mitigate the risk by ‘evacuating’ homes from flood zones over the next few generations. That would help MAGA.

    • September 7, 2017 at 2:29 pm
      Agent says:
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      Polar, saw a show the other night on Churchill, Manitoba which has a huge Polar Bear population. Sure didn’t look like an endangered species to me and there was no melting of the cap up there as some would have us believe. One of the main functions of the Police up there is to monitor the bears and they do an excellent job of it.

      • September 7, 2017 at 5:05 pm
        PolarBeaRepeal says:
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        I have never mis-behaved in Churchill, Manitoba. That’s my story and I’m sticking to it.

  • September 7, 2017 at 7:10 am
    PolarBeaRepeal says:
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    Here’s a simple change that would slow the NFIP Death Spiral I alluded to above: in the Federal Tax Return, add a line to ask if the filer has a dwelling or other structures in a flood zone. Provide in the instructions booklet a list of zip codes with recognized flood zones. Require those who answer ‘yes’ to state, Y or N, whether or not they have flood insurance in force, and if so, to provide their policy number. If no flood insurance is in force for a flood zone risk taxpayer, their mortgage interest deduction is disallowed, or if fully paid off, they incur a surcharge tax penalty. Cheap, and fairly effective, but not foolproof.

    • September 7, 2017 at 8:52 am
      Doug Fisher says:
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      Excellent idea in the vein of the ACA Insurance penalty. If someone has a competent health plan: no tax. If they don’t: tax.

      Easy enough. :)

      • September 8, 2017 at 10:43 am
        PolarBeaRepeal says:
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        There is no ‘excellent ideas’ in ACA. Go sit in the corner and write “I must not troll the website with useless or false info.” 100 times.

        • September 8, 2017 at 2:00 pm
          Doug Fisher says:
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          Tell that to the millions of people who have health care for the first time in their lives. :)

          I supposed Democrats should have modeled their plan after a Democrat idea, not a Republican one from just a few years before. Then the ideas in the ACA could have been “excellent.” If only some of those Republicans in control of all levels of government would just share some of those HEALTH CARE SPECIFICCS instead of hogging them to themselves. LOL!

          • September 8, 2017 at 2:49 pm
            PolarBeaRepeal says:
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            Give me a list of their names and addresses and I’ll run out to the PO with a few bags of outgoing form letters with a message to that effect.

          • September 13, 2017 at 12:06 pm
            PolarBeaRepeal says:
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            Health care is NEVER denied to ER visitors. Never. Ever.
            Go back to the corner and add another 100 lines onto you first punishment assignment.

          • September 13, 2017 at 2:04 pm
            Ron says:
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            And that is exactly why you cannot compare HCI to other lines of insurance.

          • September 13, 2017 at 4:52 pm
            Doug Fisher says:
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            I agree, we should continue to burden ERs around the country with non-emergency services since that is the only way many people can get the help they need.

            I also endorse continually bankrupting people as they are forced to pay insurmountable medical bills as a result of ER visits.

            #MAGA

    • September 7, 2017 at 1:51 pm
      NY Broker says:
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      I like the idea. There should also be a state or national database containing proof of flood insurance for those located in high hazard areas. This will provide the IRS with a place to check the information. I would also not allow any uninsured dwelling to be rebuilt in the flood hazard area without a requirement that they maintain flood insurance. They will need to show proof each year, and if they do not, the state should provide the coverage and tax them for the costs. if they do not pay, a lien is placed on the property and in the event of a flood, they are not allowed to rebuild.

      • September 7, 2017 at 6:43 pm
        PolarBeaRepeal says:
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        Psst; NFIP has one, but people cancel their policies, and I’m not sure if that’s reflected in the db. And, if private flood insurance were written, the above approach would be necessary.

    • September 8, 2017 at 11:45 am
      MOBROKER says:
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      Makes too much sense unfortunately..

    • September 12, 2017 at 5:52 pm
      Ohio Agent says:
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      Won’t work. Flood zones are determined based on land grade/elevation, soil drainage, proximity to water (lakes, creeks, rivers,) etc..
      Flood zones are not based solely on zip code. I know of an intersection in my area that has 3 separate flood zones (same zip code).
      In this situation, the Southwestern point is on a steep upgrade and never floods, the Northwestern point is slightly elevated and has some water backup and may flood 1-2X every few years depending on rain total or snow melt totals upto to a foot or so. The Southeastern and Northeastern points run about a 1,000 ft from a Creek and floods approx. 4-6X a year where city officials close down the roads as they wash away.

  • September 7, 2017 at 1:34 pm
    Henry A Vogel says:
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    I wonder if everyone knows what a flood zone. All most all of the United States have been zoned. The problem lies with the fact people in an X one think their safe. if that was so, then Houston would have 80% less flooding with Hurricane Harvey. My believe is anyone with a mortgage needs to have mandatory flood insurance. Accomplishes two problems. First, the 80% that don’t have flood insurance and waiting on a FEMA handout would have coverage. Second, with more people in the pool, the cost should decrease, i said should decrease but remember FEMA is a Government program.

  • September 7, 2017 at 5:31 pm
    Bill says:
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    If you are required to have flood insurance per your mortgage company, how could they be lax in enforcing their requirement? Around here the flood premium is either escrowed or if it’s not escrowed and the borrower doesn’t pay their flood premium, it will be forced-placed. How could that not be the case along the coast?

    • September 7, 2017 at 6:44 pm
      PolarBeaRepeal says:
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      Banks are lax because they’re too damn busy complying with a billion unnecessary financial regs under Dodd-Frank. MAGA; remove Dodd-Frank and replace it with a sensible approach to REACTIVE regulation.

      • September 8, 2017 at 2:33 pm
        Ron says:
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        And before that, they were too busy creating scams to maximize their profits at the cost of Main St and the taxpayers.

        They always seem to be too busy to do the right thing.

        • September 8, 2017 at 2:52 pm
          PolarBeaRepeal says:
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          Some were; Smells Fargo. Some weren’t. Be careful in how you describe an industry that is required for all other industries to function as entirely dis-functional and corrupt. That generalization will lead to people ignoring you and categorizing you as an angry bird, Libitteral, and/ or troll.

          • September 8, 2017 at 3:41 pm
            Doug Fisher says:
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            It ain’t just “Smells Fargo”. Several large banks have been busted in the past 5 years for some hefty violations against the public trust. This involves schemes to collect undue overdraft fees, selling mortgages to those who cannot afford them, mortgage redlining, working with terrorists and drug cartels to launder money, working with Russian Oligarchs to funnel money and launder it, etc.

            By all means, I believe most small banks do a decent job at morally handling their clients’ money, but big banks are like most other corporations that size: dirty and full of crooks.

          • September 8, 2017 at 5:23 pm
            PolarBeaRepeal says:
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            OK, name them, one by one. I believe there will be fewer than I can count on the digits on my paws.

  • September 11, 2017 at 10:29 am
    Jack says:
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    Look no further than FEMA, for it caused the problem with a lot of people not having flood coverage in a low-moderate flood zone (B,C,X). When FEMA added the $225 additional tax (non-primary resid) to a reasonably priced $350 policy a lot of people simply didn’t renew the policies. I saw it a lot. TAX something a lot less of it will be bought = Econ 101.

    Let’s face it banks and real estate agents are notorious for telling clients they are not in a flood zone when they buy a home, simply to keep the monthly payment down to sell the home and mortgage. I SEE IT EVERYDAY!

  • September 11, 2017 at 10:45 am
    BROKER OF RECORD says:
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    One item not mentioned anywhere is that banks require flood insurance for only mortgage value, not the replacement cost of the dwelling. The homeowner doesn’t know any better but they must insure their equity in the structure or face more out of pocket expenses.

  • September 11, 2017 at 11:32 am
    Bobbie Whitten says:
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    I think a small part of the drop in federal flood in Mississippi is due to a couple of smaller companies like Coastal American covering flood. That is great for us because larger companies like State Farm, though making the largest profit ever in 2005 did a number on thousands of us in Mississippi and Louisiana.

  • September 12, 2017 at 1:16 pm
    CL PM says:
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    Simple rule of thumb: If the words “Creek, March, River or Beach” appear in the name of your community, then buy flood insurance. Duh.

    • September 12, 2017 at 1:17 pm
      CL PM says:
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      *Marsh

      • September 13, 2017 at 11:10 am
        Jameson says:
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        What about Ocean City?

        • September 13, 2017 at 3:47 pm
          Doug Fisher says:
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          Don’t forget Surf City :)



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