do when flood insurance is not required? They don’t buy it. What happens when people do not buy flood insurance? There are fewer insurance claims. The fact that flood maps say an area is high and dry can cause damages in surprising places when wrong. Speaking before the House Financial Services Subcommittee on Housing and Insurance in January 2016, Steven Bradshaw, Executive Vice President of Standard Mortgage Corporation in New Orleans, said “many homes that were destroyed by Hurricane Katrina were not located in a special flood hazard area. Homes outside of those zones are not required to have flood insurance. As a result, mortgage servicers were liable for the costs when those homes were wiped out.” The conflict — in New Orleans and elsewhere — is that mortgage lenders, investors and servicers naturally want

costs of flooding” resulted in substantially higher premiums for many property owners. According to Janice Baker with Affordable Home Insurance in Miramar Beach, Florida, some homeowners saw premiums go from $3,000 a year to $9,000. An article detailing the fallout from this attempt at flood insurance reform in the December 2013 Housing News Report recounted the story of one homeowner in Pasco County, Florida — where nearly 35,000 homes representing more than 20 percent of all homes in the county are in high-risk flood zones requiring flood insurance — whose flood insurance premium rose from $3,300 in 2012 to $24,300 in 2013. Thanks to horror stories like these, the public outcry produced an immediate result, and the government backed off instant premium increases. However — regardless of what happened with Biggert-Waters — the claims continued to pile up. While $20 billion was owed in 2012 the NFIP now owes $24.6 billion to the Treasury. premiums should be raised to the point where the program is no longer taxpayer subsidized. Given a $24 billion deficit, that could be a huge increase. In effect, Biggert-Waters 2.0, a program where higher costs will force owners with marginal finances to sell their units. The budget plan is “an attack on Americans with flood insurance policies, as it would raise the cost of flood How will the money be repaid? The 2018 budget proposal says

enough coverage to protect against all conceivable losses while insurance companies with equal logic want to avoid excess claims. The solution? Get Uncle Sam to take on the risk. The 2018 budget response? Enough is enough; why should taxpayers who live far from shorelines subsidize seafront condos and vacation hideaways? Retracted Flood Insurance Reform In an effort to head off financial failure the government enacted the Biggert- Waters Reform Act of 2012. The new law was necessary, said the Federal Emergency Management Agency (FEMA), because “over the years, the costs and consequences of flooding have continued to increase. For the NFIP to remain sustainable, its premium structure must reflect the true risks and costs of flooding. This is a primary driver for many of the changes required under the law.” That drive to reflect the “true risks and

The President’s 2018 budget proposal says premiums should be raised to the point where the program is no longer taxpayer subsidized.”

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