Should the USA federal govt subsidize flood insurance? What about other weather related property risks (earthquake, volcano, etc)?

[DrPepper12]

The main problem is that it doesn't really function like private insurance. It does NOT assess flood risk for EACH property; instead, premiums reflect average historical losses within a property’s risk zone. Moreover, the floodplain maps determining a property’s risk zone are often several decades out of date. As a result, premiums may bear NO relationship to the true risk of flooding. The cost of an federal policy averages about half of what would be a market rate. Congress actually mandates this inaccurate pricing method. In 2014, it hastily revoked a few tentative steps at reform after constituents complained loudly when they tried to charge something approximating market rates for flood insurance.

Who benefits from flood insurance? People in flood-prone Gulf states like Louisiana and Florida, of course. But many beneficiaries also share another characteristic: they are upper income. The program does not charge nearly enough to cover the expected costs of its liabilities. The assessments are not sufficient to build any buffer to cover an extraordinary year, such as what occurred with Hurricane Katrina in 2005 or Hurricane Sandy in 2012. Because homeowners don’t incur the full cost of building in a flood zone we end up with more houses there than if homeowners incurred the full cost of the flood risk, which exacerbates the government’s costs in the next disaster. The optimal solution would be for the government to get out of the flood insurance business entirely and leave it to the private market, which would endeavor to accurately measure risk and charge a price for its insurance that covers the expected costs. Smart reforms would also help Congress refrain from throwing money at disasters, bailing out homeowners who shouldn’t have built in flood-prone areas to begin with. Sensible long-run incentives to mitigate damage would discourage such homebuilding by exposing homeowners and businesses to the real cost of building in floodplains.

No. YOU knew the risk when you bought it! YOU insure it!

Yes but ONLY if it reflects ACCURATE premiums & risk.

Feds & private insurance should partner up to share risk at ACCURATE rates!

Public or private flood insurance should not exist. It just encourages more construction & harm to environment.

Let the private market provide it EXCLUSIVELY! Capitalism is about choices!

[Juxtapose]

I personally would rather the government not get involved unless absolutely necessary. People & businesses should get used to solving these things themselves in the open marketplace of supply & demand.

The government should be reduced to a Nightwatchmen State.

[bluesparrow]

I watched a video of a scientist talking about hurricane Katrina. He said not even the dumbest dumb gophers would build under sea level.😂😂

[Juxtapose]

Haha animals "lesser" than us know better.

[bluesparrow]

Maybe we know better, but we also know the government will bail us out.

[Juxtapose]

Learned helplessness.

[DrPepper12]

If the property is deemed uninsurable risk by the private market What would you tell these people then? What would you tell the bank holding the mortgage? I'm just curious 🤔

[Juxtapose]

If you cannot insure a flood zone then don't build there.

[exitseven]

I thought that was what National Flood Insurance was.

[exitseven]

Thanks for the MHO😎

[DrPepper12]

Yes The premiums do not account for the totality of the risk and taxpayers make up the difference which just encourages wealthy people to build on land that they shouldn't because the taxpayers will pick up the tab.

[exitseven]

Yes, my family had a house literally right on the ocean. We had National Flood Insurance. My cousin sold the place 3 years ago. Last winter the whole place was destroyed in a storm.

[jshm2]

Why the fuck would you buy a property in a flood risk zone unless you can afford to lose the money?

[DrPepper12]

Well that's the problem from my point of view! Your encouraging people to build or rebuild in an area of known risk and they don't give a shit because the taxpayer is going to pick up the tab because the premiums from the national flood insurance program in no way reflect the risk.

[OtterMan68]

the free market should handle it. Subsidizing it only encourages people to build there then stay there after flooding