https://www.npr.org/sections/money/2017/09/29/554603161/epis...
tl;dl: They are the insurer of last resort. They have paid out 10x the value of some houses that are constantly flooding.
https://www.nbcnews.com/news/us-news/roofing-scams-florida-p...
However, there are cases where the benefits outweigh the drawbacks.
For example, it's nice to get your energy, metals, computers, industrial machines domestically instead of being at the mercy of a foreign country. Especially if the foreign country isn't ideologically aligned with yours.
Everywhere's a disaster zone now, we need to account for that, do our best to warn people, and do our best to help people get back to it. This is true here, and around the globe.
Mass migrations are _destabilizing_. It's not crony capitalism, it's common sense for stability.
And there are certainly places that are absolutely irredeemable and shouldn't have insurance. But this idea that letting people whose homes are destroyed in natural disasters need to be hung out to dry won't be worse than helping them get back onto their feet both for them and most likely for you is a bit odd.
If a specific area floods very frequently, it seems silly to keep bailing it out.
At some point we have to cut our losses and face reality and just stop investing there.
Edit: and then install retaining infrastructure in place of those houses and you stop future issues too for neighbors
Specifically, 1% of properties make up 25% of all claims.
Should we say that NYC should be abandoned cause Sandy hit 10 years ago and another might hit again one day?
And also I actually said in my post "there are areas we shouldn't".
However, Ft Myers is different from NYC in that sea level rises affect South Florida a hell of a lot more than Manhattan. A 10 foot sea level rise would only affect a small (but definitely not insignificant) part of Manhattan. That same rise would render all of Florida's coastlines (on both sides) uninhabitable. See link below:
NYC doesn't get hit anywhere close to as often as Florida's coasts do. It's not even comparable.
The insurers are leaving Florida in droves because their risk assessment teams understand that sea level rises and climate change is a significant financial risk to their operations in Florida, no matter how much Governor DeSantis wants to pretend otherwise.
It makes zero sense to insure areas that are going to be uninhabitable in our lifetimes, much less spend billions rebuilding them time and time again.
Disclaimer: I live in South Florida.
Disclaimer: Also in South Florida
However, the rapid rise in sea level and the fact that the state legislature is bound by law to not discuss it at all is also a factor. South Florida's coasts will be uninhabitable within 50 years, and if I'm an insurer, that's also on my mind.
Also, the efforts that I've seen are sub-par at best. Miami wants to build barrier islands that are a few feet above sea level in order to create a basin-type barrier around Brickell (the financial district where Ken Griffin is building a tower). Those are still in the early stages of bureaucratic hell and won't likely be built until it's way too late.
pun intended?
Then do it over a period of time. Reduce it to zero over, say, thirty years.
Just because something superficially resembles a good idea, doesn't make it a good idea. See also: corn subsidies.
Insanity is not stability.
It's one thing to maintain some status quo (e.g., a small town / neighborhood is already established). It's another to encourage and reward bad decisions.
There's no reasonable justification for maintaining a pattern that is destined to fail. Again and again and again.
Is this what we considered smart and effective government?
That is one of the biggest arguments against the NFIP. It’s a specific subsidy that benefits some areas more than others (it’s also a deeply regressive policy).
So it’s either subsidy upfront or on the backend?
FEMA specifically mentions that you can’t expect replacement housing costs to be paid in many of their documents: https://www.fema.gov/fact-sheet/earthquake-survivors-apply-f...
If SF sees 50% of houses uninhabitable and 12% have earthquake insurance you think the govt will shrug and say “too bad”?
The Senate never passed it and the President promised to veto it.
I have no crystal ball to know what might happen in the future but right now there is no earthquake equivalent to national flood insurance and recent history suggests the federal government doesn’t have the appetite to add it.
What I expect is less insanity. Sure, help the people that were there. But for others to be coming in from the outside and exploiting the gov's offers, that's hardly reasonable and smart.
Furthermore, it's hypocritical - and costly - for the gov to say "climate change is coming it's going to raise the oceans..." and then in the next breath "here's taxpayer money to rebuild in a low-lying area because this isn't going to happen again." If we want people to take climate change seriously, then mixed signals like this aren't helping.
As any true Scotsman knows.
It's as if you missed the college debt forgiveness. What was that? First, the gov stepped in, manipulated a market, increased demand, etc., and that eventuallyt went sideways.
And then it stepped in to pull the plug in that mistake. The POTUS promises the forgiveness program will make buying a home more afford...because the demand he created won't result in higher prices. Huh?
The only doom comes from those who can't face facts and keep their heads buried in the sand.
No one with a fucking brain thinks that was a good idea. But that's what Democrats do.
Does the government pay half your salary? They take half of mine.
And I'd really like to understand how the government "takes half" of your salary. Either you're super rich (probably not), or you're exaggerating.
But then think about all the various taxes we pay directly (e.g., gasoline, internet and phone services, etc.). Then add on the taxes that are embedded in the costs of any of the other goods we buy. It adds up.
Finally, if you consider The Fed a government agency, any time The Fed devalues your money (i.e., "prints" money and creates inflation) that's also all but a tax. That is, we have less to spend.
It might not be half, but it's certainly significantly more than your income tax rate.
If you live in a major metropolitan area, or own a home that has rapidly appreciated, well, it all adds up quickly.
Also consider: import taxes raise the price of goods, and thus are a wealth transfer from consumers to producers. Sugar is the classic example: import tariffs increase the effective tax burden of the lowest income quartile substantially, as they spend a larger percentage of their income on food. Anything with high fructose corn syrup, sweetener, or sugar is more expensive. And the corn farmers get that money.
But to your point, yes we should also stop subsidizing water in the US southwest including California.
No California homeowner is paying less for homeowner’s insurance because it is sold at below cost by the federal government. They may or may not get bailed out when a loss occurs, which is different from knowing that you will.
I'm a master of my areas of the federal code, I was not aware of this area!
> A 2020 survey conducted by the group found that 27% of all American homeowners insurance policyholders said they had flood insurance. And Wharton’s Risk Management and Decision Processes Center similarly found that, on average, 30% of homes in the highest-risk areas nationwide have flood coverage. [...] About 56% of consumers incorrectly assumed floods would be covered by their homeowners’ policies, according to a 2021 survey by the National Association of Insurance Commissioners.
https://www.nbcnews.com/news/us-news/hundreds-thousands-flor...
> President Joe Biden declared nine counties disaster areas Thursday, making residents eligible for federal aid to pay for minor home repairs, short-term housing and other emergency costs. But of the 1.8 million households in those nine counties, only 29 percent have federal flood insurance, according to an analysis of government records by POLITICO’s E&E News. That leaves 1.3 million households at ground zero without federal flood coverage.
https://www.politico.com/news/2022/10/01/hurricane-ian-will-...