NAIC Drafts Changes for NFIP, Encourages Long-Term Reauthorization

August 15, 2016

  • August 15, 2016 at 1:27 pm
    Jack Kanauph says:
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    I would like to see more transparency in the claims, and in how they are in the hole for $26 billion.
    I also think they need to stop giving money out to people who choose not to buy flood and then incur a flood loss.

    • August 16, 2016 at 8:44 am
      Yogi Polar Berra says:
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      The ‘hole’ was caused by inadequate rates EVERYONE knew were inadequate.

      But, politicians did nothing about it and ….. then BOOM! Katrina, Rita, Sandy, and other hurricanes exposed those rate deficiencies very abruptly.

      Politicians giving money through emergency payment to people without NFIP coverage = buying votes for their next re-election bid. Good luck with trying to stop politicians from doing THAT! If that is your biggest concern, you should push for an end to such ‘Social Engineering’ Insurance Programs; e.g. Medicare, Medicaid, Medicare Part D, and … The ACA.

  • August 15, 2016 at 1:40 pm
    Omni Sure says:
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    Here is another one to add to the list of prudent changes:

    Don’t allow homeowners and business owners that have NOT purchased a FEMA/NFIP Flood Insurance Policy, and have never even paid ONE DIME into the FLOOD SYSTEM, any FEMA MONEY or TAX PAYER MONEY after a claim. They SHOULD have purchased a FLOOD policy to be covered for FLOOD damage. The Flood System is adversely effected due to lack of premium payment participation. The FEMA MONEY, GRANTS, NO INTEREST LOANS and any other FEMA Catastrophe Funds go to UNINSURED Flood Damaged “victims”… (Why?)…because the POLITICIANS hand out FEMA MONEY to the UNINSURED by the $BILLIONS, just to get VOTES! Super Storm Sandy was the most recent example of politicians crying for FEMA MONEY for VOTES.
    Since most FLOOD damage occurs in NON FLOOD ZONES, maybe the whole country should be considered a FLOOD ZONE and some minimal premium of say… $450.00 should be collected by all to grant access to any form of FEMA catastrophe (VOTE BUYING) dollars!

    • August 16, 2016 at 8:24 am
      Yogi Polar Berra says:
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      Agreed. This is similar in nature to the provision in the ACA that allows those who don’t have insurance to ‘buy in’ AFTER they become ill. This feature creates GREATER incentive for adverse selection against insurers / the NFIP. If the Federal government is ‘good at anything they do’, it is in ‘being bad at everything they do’.

  • August 15, 2016 at 2:17 pm
    Justin says:
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    I think there is a key point that officials skirt around but the fact of the matter is that Flood Insurance can be viable in the market if it can be priced properly but if rates are artificially suppressed there is no possibility of it working in the private market.

    The other thing they should consider doing is a surcharge for flood that is captured on every single policy so that even if a homeowner doesn’t purchase flood insurance, they still contribute towards a fund to help pay for the losses. That is part of the issue currently as the only folks who buy NFIP coverage are the ones sitting in or next to a flood zone so they have a selective disadvantage by not being able to average out the losses over a larger pool of insureds.

    • August 16, 2016 at 8:30 am
      Yogi Polar Berra says:
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      Your last idea is well intended, but will work to the opposite effect. Those in flood plains should be encouraged to exit over a 50 year period wherein local and state government buy out the property owners and replace dwelling with parks, and commercial structures that are impervious or highly resistant to flood damage.

      Mitigation efforts will work much more effectively than ‘permanent subsidies’ you are suggesting that will only maintain or increase the costs of flood damage to dwellings near waterways (that is unnecessary in the modern era of motor vehicle transportation).

      • August 16, 2016 at 8:31 am
        Yogi Polar Berra says:
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        Addendum; local governments need not subsidize the buyouts of properties near flood zones if they can later sell all/some to commercial enterprises and recoup prior buyout payments through property taxes on those businesses.

        • August 16, 2016 at 8:37 am
          Yogi Polar Berra says:
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          Addendum #2: an example of the type of commercial buildings I envision for flood plains would be warehouses in ‘raised structures’; i.e. first, and perhaps second floors would be vacant.

    • August 16, 2016 at 9:20 am
      Jack Kanauph says:
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      Private market will work in Florida:
      There are about 2 million federal flood insurance policies in Florida, more than in any other state and more than a third of the overall total. Yet over the history of the program, Floridians have received less than $4 billion of the $50 billion that has been paid out in claims. If anything, homeowners and businesses should be getting discounts instead of being gouged to help make up the program’s $23 billion deficit.

  • August 17, 2016 at 9:46 am
    Jack Kanauph says:
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    FEMA is estimating that only 14.1% of the homes in Louisiana affected by the flooding have flood insurance. It’ll be interesting to see what happens.



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