The problem is government and insurance company subsidies for those who choose to built in floodplains and along coasts.
If these properties had to bear the true risk management cost of their location, very few would choose to build there.
In FL, where I presently live, what this means is that the 95% who cannot afford to live on the waterfront provide enormous subsidies to the 5% who do.
Many of the flooded homes in NO were built long before the government ever became involved in flood insurance. The older levees held, but all of the canal breaks were at points reengineered by the Army Corp within the past decade. Surely we had a right to expect the levees paid for by our tax dollars to be soundly built.
Perhaps there should be a larger premium differential than there is for high risk areas, but shouldn't the same apply to other types of risk (mudslides, tornados, fires, etc.)? And shame on the people who lived without insurance inside the floodplain.
I'm not looking for a handout from FEMA or anyone else to recover my losses. But I do hold the engineers accountable and want a fair shake from my insurance co. for the storm (not flood) damage. Their view is that if you had ANY flood damage they are off the hook and they don't have to honor their coverage - even when you had (as we did) storm damage before the levees broke.
If you think the homeowners of NO haven't borne the risk of loss, you are mistaken.