National Flood Insurance Program Secures $1 Billion in Reinsurance for 2017; 25 Reinsurers Participate

January 3, 2017

  • January 4, 2017 at 11:58 am
    TrumPolarBear says:
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    This is a good move.

    But they still need to reduce the underlying risk by mitigation efforts; e.g. block new building in flood zones, and prevent long term repairs of existing dwelling structures currently in flood zones.

  • January 5, 2017 at 8:00 am
    Roland says:
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    Gosh, NFIP is starting to look more like real insurance all the time: higher premiums, now reinsurance. So why does the government have to be involved at all?
    NFIP is a boondoggle cooked up by vote-grubbing politicians who thought they could suspend economic reality. Abolish it.

  • January 5, 2017 at 9:51 am
    Why Not? says:
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    I agree with the comments above, this effort does not resolve the underlying problem. Not knowing the probability of hitting the $4-$8B trigger zone or the cost to purchase the reinsurance layer, is this the best use of capital? It’s early in the year, so I’m going to take a positive approach and suggest that the private sector involvement will trigger better risk management and lead to a better solution in the future!

  • January 6, 2017 at 7:27 am
    TrumPolarBear says:
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    Similar to other lines of insurance, when the frequency of losses rises too high, for whatever reason, or severe claims become too prevalent and contribute to unaffordable premiums, the govt steps in – too soon. When the govt involvement doesn’t solve the problem, innovative people in the private sector come up with solutions they should have pursued years ago.

    Too many buildings in flood plains, new and old, and shifting flood plains, will increase frequency of losses. Government can help mitigate the risk by legislating building ordinances preventing expansions and planning for the long term elimination or reduction of existing dwellings in flood plains. The land vacated can be bought by the local government and sold to commercial firms to use for warehousing mobile equipment and goods. Or it can be converted to waterside parks.

    Severity of flood claims can be mitigated by reducing the variance through reinsurance programs such as the one described in the article. Two heads are better than one, and the private sector has many more experienced and qualified ‘heads’ than the government will or should ever have.

    • January 6, 2017 at 8:04 am
      Roland says:
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      Well said. There will be a massive price to pay if this problem – which was caused 100 percent by government interference in the insurance market – is to be undone without hurting a lot of people who have been victimized by NFIP. I wonder how many of these structures never would have been built in the first place if not for the lure of artificially low flood premiums.
      When rates are being set by the market, and your agent quotes an annual flood premium of $20,000 for your planned $200,000 house, the market is trying to tell you something: “It’s too risky to build here.”
      Building codes as well should be formulated and applied by private enterprise. Any time you subject something like this to politics, the results will not be as good as if it were left to entrepreneurs who have to prove their value to consumers by passing the profit and loss test year after year.

      • January 6, 2017 at 10:47 am
        TrumPolarBear says:
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        Agreed. Well said.

        What we are agreeing on is that government will tax citizens to subsidize something because they are entrenched in their roles / political careers. to the contrary, private sectors will FIX problems because their CEOs are employed at the whim of stockholders, and not by citizens who want to be subsidized and enjoy their current lifestyle.

    • January 6, 2017 at 12:56 pm
      UW says:
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      So government is doing too much, but they should buy all the property in flood-prone regions? Dumb.

      • January 6, 2017 at 4:56 pm
        TrumPolarBear says:
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        You couldn’t afford my fee to see my full proposal on this issue.

        Flood prone zones should be vacated over time. Do you have a problem comprehending that concept?

        • January 7, 2017 at 8:59 pm
          UW says:
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          You just listed enough of your “proposal” to know it is idiotic. But, that’s giving you the benefit of the doubt and pretending you have a proposal, which you don’t, obviously.

          • January 8, 2017 at 11:11 am
            TrumPolarBear says:
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            Your opinion is wrong, uninformed, and politically motivated to continue socialist policies against the Will of The People.

          • January 9, 2017 at 7:33 am
            TrumPolarBear says:
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            Please STATE exactly why my proposal OUTLINE is idiotic – – – in specific terms, and why they won’t work… UNDER REPUBLICAN state and federal governments that is currently in place in over 30 states, and at the Federal level, and which is projected to endure for a long time.

          • January 9, 2017 at 11:17 am
            UW says:
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            Well first off, idiot, you proposed the having the US government purchase property, including houses and businesses along almost the entire east coast as a solution to the problem. That is socialist, and arguably communist.

            Second, dolt, look at a map of the flood prone areas. Basically all of Florida, including all of Miami, all of Louisiana, most of New York and California, a good amount of TX, MS, AL, GA, SC, NC, VA, NJ, CT, and more. It would be insanely expensive, and then what do we do with th the people leaving the heavily populated aread with much of the infrastructure in the country?

            The idea is do patently stupid it is astounding you not only presented it, but asked why. Dumb, dumb, dumb.

            Stick to cartoons and misquotes.

          • January 9, 2017 at 12:54 pm
            TrumPolarBear says:
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            Wrong. Again.

            Local Govt is not US Govt.

            I know of PLENTY of municipalities that are doing such things for various reasons.

            Libitterals can’t ‘think straight’ after such a humiliating defeat on 11/8/16.

            TrumPolarBear is ‘MLMDA’; i.e. Making Libitterals Melt Down Again.

          • January 9, 2017 at 12:56 pm
            TrumPolarBear says:
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            Also:

            “Entire East Coast”

            “All of Florida”

            are two lies.

            Hyperbole is the tool of fools, i.e. Libitterals.

          • January 9, 2017 at 1:55 pm
            UW says:
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            Wow, that’s an even dumber plan then. Local government cannot afford to buy all the real estate in their area, or even a lot of it. Also, genius, being local government does not change the fact that this is a socialist proposal.

            “All of Florida” This is a misquote, your fake college apparently didn’t teach you how to cite properly, or you are a liar. Almost all of Florida is a flood zone or is quickly becoming one. But I won’t debate this retarded plan with you, it’s stupid, proposing it is stupid, and pretending it is legitimate is stupid.

            Do you eveb realize it’s a socialist “plan”? Do you even know what socialism is?

          • January 9, 2017 at 2:43 pm
            Confused says:
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            “Your opinion is wrong.”
            Classic Yogi

          • January 9, 2017 at 7:57 pm
            TrumPolarBear says:
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            I didn’t say local governments would buy ALL flood zone properties.

            And I didn’t say those properties would be bought out instantaneously.

            Go back to kindergarten and restart your reading lessons.

          • January 10, 2017 at 12:25 am
            UW says:
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            So your plan is to have local governments, who cannot afford it in any way, shape or form, buy a huge amount of property in flood-prone areas, using the tax payer money of others to compensate people who made bad investments in property, but not all of the property, making the private sector account for the rest? What if people don’t want to leave the coast, which is generally the most expensive, most developed land in the nation? Obviously, if government is buying up land to give to private industry, there will be increased demand for the rest of the land, which will increase the price, making it more expensive for government to buy the remaining land, which creates a feedback loop where nobody wants to sell.

            How do you decide which property government buys to bailout people? Sounds a lot like government picking winners and losers to me?

            I’m kidding of course, the entire “plan” is retard even on a superficial level, and it’s comical somebody would mention it without it being a joke.

      • January 6, 2017 at 6:16 pm
        Roland says:
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        Many folks who were enticed by artificially low flood premiums have seen them rise to astronomical levels since Biggert-Waters. Now they can’t afford flood insurance, and they can’t sell the property because no buyer in his right mind will touch it. So they’re stuck there, waiting for the next flood to wipe them out.
        Ideally those people would have recognized that NFIP was a house of cards and not built or bought in the first place. But since the average government-schooled American knows little about economics, that ain’t the case. I’m not comfortable telling them, “Tough luck; you should have known better.” Not too long ago, I didn’t know better either.
        Therefore I wouldn’t be opposed to some government buyouts if they were in conjunction with shutting down NFIP altogether.

        • January 7, 2017 at 5:15 pm
          TrumPolarBear says:
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          I largely agree. But a small pool of NFIP risks may have to remain for a long period of time to cover risks which have no alternatives due to no fault of their own. Whether or not those can be administered and financed by the private insurance industry is unknown, but it is a challenge they can certainly accept and possibly overcome.

      • January 7, 2017 at 5:11 pm
        TrumPolarBear says:
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        The purchase of private dwellings by local governments OVER A LONG PERIOD OF TIME OVER WHICH THOSE HOMES WILL ‘DECAY’ is a way to mitigate the flood risk. It is superior to buying those homes now and having a glut of vacant property to re-direct to alternate uses, and/ or sell to commercial firms for warehouses, etc.

        It is also more equitable to force local governments to address their problem rather than penalize other governments by forcing them to subsidize flood risks in other towns or states. Of course, liberals & Socialists won’t think so, but US states have a great degree of autonomy in the REPUBLIC of the USA.

        • January 7, 2017 at 5:25 pm
          TrumPolarBear says:
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          Clarification: local governments could buy dwellings in flood plains and convert them to parks – over a period of DECADES – as the owners vacate them to move to dwellings outside flood plains. Alternately, flood zone properties could be sold to commercial firms to build water-impervious multi-floor warehouses with vacant ground level floors, or similar structures which are impervious to flood waters.

  • January 9, 2017 at 12:17 pm
    JBG1955 says:
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    Some of you need to calm down, take a breath. As Jimmy Buffett sings to the people of New Orleans “Breath In, Breath Out, Move on”. THE NFIP is not insurance anymore, or maybe never was. It’s a pass through to the taxpayers. The agents and companies take their huge commissions and could care less about the results of the program. The politicians can not take the heat for charging an adequately sound rate that needs to be charged. When it was attempted there was a Commissioner that sued NFIP to slow down the increases down. We are going to have to live with the inadequate rates and let the taxpayer put up the tab. Too many people are affected. Buying this reinsurance is a small step toward having the program stand on it’s own.

    • January 10, 2017 at 7:28 am
      Roland says:
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      Good post. The cronyism is something I usually point out too when blasting NFIP; I just hadn’t got to it yet in this round. NAMIC, much to its shame, has consistently lobbied in favor of NFIP. The reason is obvious: taxpayers are on the hook for the risky stuff while NAMIC member companies get to write the profitable coverage – on structures that never should have been built in the first place.
      If the program ever does get to where it can stand on its own (count me skeptical), turn it over to private enterprise ASAP and don’t look back.
      I have no obligation to come up with a solution just because I criticize the current mess. Being an opponent of central planning, it’s not my job to come up with my own central plan to fix what the buffoons in D.C. have screwed up with their central plan. The best I can hope for is that people will learn some basic economics and not be suckers for these nutty do-gooder schemes in the future.



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