New flood insurance rates spark anxiety in Gulf

Flood insurance used to be offered in the private insurance market and then the government took it over.

You have addressed a critical point. The feds have robbed the national flood insurance fund. Folks who carefully followed the post-Sandy stories last year noted that people without flood insurance were back in their repaired homes while those who had faithfully paid their national flood insurance were waiting, waiting, waiting for checks months later.

Sorry, I didn’t say that right. It isn’t fair to increase their rates THAT high. Increases are expected. But raising them that high, after they have lived there for a long time is unreasonable and unfair. And, no, taxpayers should not be responsible for anyone’s flood insurance. A more equitable solution should have been sought.

Decisions made by unelected political appointees is not the way this country was set up.

Fair enough. But the bottom line is that the premiums for flood insurance MUST reflect the risk involved, and that cost must be borne by those that take the risk.

There is a reflex to “grandfather” everyone for all sorts of government programs.

The fact is that if something is divorced from reality, it must be brought back to reality without subsidy, because we do not have the luxury to subsidize anybody for anything. This is true for flood insurance, social security, medicaid, food stamps, obamaphones - everything.

ANY form of grandfathering of any government benefits is wrong. Intergenerational cost-shifting is wrong any way it is implemented.

The problem with this change in the flood insurance program is that the banks who hold these mortgages were not required to disclose the enormous jump in flood insurance premiums.

If you bought a house with a creek in the back yard, you're in the flood plain whether or not the thing actually poses a danger to your property. If you budgeted $2000 a year for flood insurance (based on the disclosure of said flood plain) and suddenly your insurance jumps to $12,000 per year with no notice and no warning, how would you feel?

The banks and realtors were not required to warn anyone that, although insurance was afforable last year, this year it's not and there's nothing you can do but allow the home to be forclosed.

This only affects people who hold mortgages. People who own their property outright can cloose to forego flood insurance. People who have spare cash right now will be able to buy up all the waterfront properties at fire sale prices, since their owners will have little choice but to walk away and allow the banks to forclose.

Who benefits from this? Not you or me, since our taxes go up no matter what the flood insurance program does. The people benefitting from this are the ones with ready cash to snap up all the soon-to-be forclosed properties.

“...These folks are looking at a house that will cost them $57,000 per year to live in. The view might be nice, but can they afford it?”
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I don’t know if they can afford it or not. One thing I do know and that is that they shouldn’t expect me and others to HELP them afford it. There are choices and there are consequences. Folks need to be responsible enough to accept and live with the consequences of their choices.

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