NFIP is Under Fire

Lawmakers To FEMA: Flood Plan Overhaul Is ‘Too Little, Too Late’

The Federal Emergency Management Agency is making sweeping reforms to the nation’s flood insurance program in the wake of a series of critical reports on NPR and the PBS series Frontline. But lawmakers say this isn’t enough when private insurance companies are profiting millions of dollars from a program that is already $23 billion in debt.
Sen. Bob Menendez, D-N.J., and other lawmakers say they are considering removing private companies from the National Flood Insurance Program.

“This is a federal program at the end of the day,” says Sen. Bob Menendez, D-N.J., whose constituents were heavily affected by Superstorm Sandy. “It needs to fundamentally transform. And if it cannot do so on its own, then we have to consider legislatively whether we scrap the entire model.”

One thought on “NFIP is Under Fire

  1. The NFIP became law as a title of the 1968 Housing & Community Development Act. The first policy was issued in Monroe County Florida on June 6 1969. The National Flood Insurers Association service the program until terminated January 1, 1978. The so called Write-your-own [WYO] started October 1st 1983 and still exists.

    The insurance mechanism in the NFIP has been the focus and operated poorly since the first policy issued. But the real problem is the lack of land use controls by the States and local governments that often have poor or even non-existent building and zoning codes and enforcement.

    And the mapping aspect maps the flood not the storm.

    All involved have gamed the system so here is what must be immediately done. All current NFIP policies whether issued by the federal government directly or WYO [and remember the real underwriter of the program is the federal government–it determines risk and the price of that risk and backs all claims under policies] should be allowed to run off over a decade if premiums paid but in non-coastal areas [counties] the federal government should offer reinsurance to States if they meet certain incentives. In coastal areas sea level rise alone makes federal insurance a necessity but only for claims arising directly under a policy and not for claims involving the negligence in issuance and servicing of the policies.

    THE BOTTOM LINE IS THE NFIP IS A LAND USE PROGRAM and only where mitigation and adoption and enforcement of appropriate zoning and building codes or restrictions on building at all should the feds be the underwriter.

    Florida’s program exposes its program to over $13B in immediate losses and is a constructive fraud on the public. If it is to survive in even inland areas it will need federal reinsurance.

    Flood mapping in coastal areas should be the job of NOAA not DHS/FEMA and inland/riverine mapping can build on the 45 year effort of the NFIP and be turned over to the states. Private admitted carriers in each state with non COASTAL PROGRAMS CAN BE THE REAL INSURER AND UNDERWRITER.

    There is no longer any reason for the federal government to worry over states areas of concern.


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