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unavailable, and waterfront real estate prices will plummet — a politically unacceptable result. According to NAR’s Brown, when the NFIP expired more than “1,300 home sales were disrupted every day as a result. That’s over 40,000 every month. Flood insurance is required for a mortgage in the 100-year floodplain, but without access to the NFIP, buyers simply couldn’t get a mortgage or vital protection from the No. 1 cause of loss of property and life: flooding.” The bottom-line reality is that from a government perspective it’s cheaper to have flood insurance subsidies than to devalue millions of waterfront properties, especially when the future availability and price of private flood insurance are uncertain. Future Costs Will Be Higher Costs and claims in the future are likely to be higher if only because risks are growing as waterfront areas become increasingly developed and populated. No less important, while the seas are rising shorelines are not. This year, Elder Dallin H. Oaks — one of the 12 Apostles of the Church of Jesus Christ of Latter-day Saints — told graduates at Brigham Young University-Hawaii, that “seacoast cities are concerned with the rising level of the ocean, which will bring ocean tides to their doorsteps or over their thresholds.”
insurance, despite the fact that many of them are already struggling with unaffordable premiums,” said Rep. Maxine Waters, D-CA, co-sponsor of the 2012 legislation. Waters has an alternative to the 2018 budget plan. Her solution? Forgive the $24 billion owed to the Treasury and start fresh. “Because I am so concerned about the premium costs of this insurance to our constituents,” said Waters in March, “I would love to forgive the whole $24 billion, wipe it out.”
owners are currently limited by regulatory barriers to purchasing a one-size-fits- all NFIP flood insurance product, even though private policies can offer more comprehensive coverage at a better rate. This bill would remove excessive restrictions and would give states more flexibility to license and regulate private flood insurance.” The proposal has bi-partisan support in this Congress but did not go anywhere in the last one. The legislation raises several issues; First, can private insurers actually deliver superior coverage at a lower cost? Second, if more property
Maxine Waters U.S. Representative for California’s 43rd congressional district Because I am so concerned about the premium costs of this insurance to our constituents, I would love to forgive the whole $24 billion, wipe it out.”
The experience with Biggert-Waters shows that it will be politically impossible to raise premiums to the point where the flood insurance program is self-sufficient. At the same time forgiving $24 billion in debt is an “an unrealistic wish” as Waters admits. Paying off the current NFIP debt would effectively result in a subsidy for past property owners covered under the program, a $24 billion gift. An alternative choice is HR 1422, the Flood Insurance Market Parity and Modernization Act. The bill’s sponsor, Rep. Dennis A. Ross, R-FL, says “property
owners use private insurance then how will the NFIP program be funded? Third, will private insurers flock to the flood insurance business given past government losses? Government Insurance Entanglements If a corporation had a product which racked up almost $25 billion in losses, the solution would be obvious: stop. The catch is that the government is not a corporation. It must continue the flood insurance program because if coverage ends enormous numbers of borrowers will be in default, new financing will be
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