EDITORIAL: Continue federal flood insurance, but not forever
Flooding was a covered risk in homeowners insurance policies until the 1950s, when insurance companies decided they were losing money on it. The National Flood Insurance Program was created in 1968 and it put the federal government in the business of providing insurance to people who couldn't afford it or could not buy it on the private market. The premise was that the government would save money on disaster relief and use that money to underwrite the flood insurance program. If there was a bad year with a lot of claims, the flood insurance program could borrow money from the federal treasury and pay it back, with interest. Hurricanes Katrina in 2005 and Sandy in 2012 sank that idea. The program is now
To make sure enough people bought into the program,
There are some myths about federal flood insurance.
Yes, there are mansions on the ocean insured under the flood insurance program, but a majority of the covered properties are owned by people who would not be described as wealthy. In
There have been limited attempts to use government money to buy people out of shoreside houses subject to frequent flooding. They have met with limited success. The goal of federal officials now is to reduce the damage to properties in high risk areas.
That's a good idea, but how long are we going to do that? It is difficult to propose this, but eventually we are going to have to abandon some of these properties if we don't want to forever provide government-sponsored insurance for people who live in high-risk areas. Whether it is the result of human activity or part of a natural cycle, there is significant evidence that the earth is getting warmer and sea levels are going to rise for decades to come. At-risk areas are going to expand, and maintaining the present program is going to become unsustainable.
Property rights are sacrosanct in America; the government can't just take land and houses without paying. Ultimately, we are going to have to buy out some people covered by federal flood insurance. Our suggestion: do what was done when the
Something has to be done by
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