From Bloomberg.com: FEMA’s Demise Could Mean for Flood Insurance
The announcement last week from Homeland Security Secretary Kristi Noem that she plans to “eliminate” the Federal Emergency Management Agency (FEMA) has cast a pall over the US government’s disaster response unit.
While most of the focus has been on what it would mean for disaster recovery if the agency is wound down, there’s another big issue at stake: FEMA’s foundational role in managing the National Flood Insurance Program (NFIP). Any changes to the program or how it’s run can potentially disrupt the lives of millions of homeowners living in flood-prone areas.
Thanks to Chris Jones for the citation.
Recovery Diva 
As the article stated, the NFIP was developed “because private insurance for flood risk failed; insurers simply couldn’t price policies affordably enough for most homeowners”. Essentially, the private insurance market was unable to quantify the risks of flooding. The NFIP was developed to address that issue, and permit development in flood prone areas. Now, more than 50 years later, the science has increased our understanding of the risks of flooding, as shown by the availability of private flood insurance in many markets.
Given the NFIP was developed to address a market failure (the unavailability of private flood insurance) and that is no longer the case, maybe it’s time to declare success and allow the private sector to take over the market. There may be some role for governmental subsidies for some income eligible residents but for most residents, the cost of insurance would be unsubsidized. Flood insurance could then be wrapped into standard homeowner’s policies.
Now that the risks can be quantified, there seems to be little reason to treat one group of homeowners (those in flood zones) differently from those facing other risks (such as tornadoes, wildfires, or earthquakes). Homeowners would benefit because insurance coverage could be better integrated and might no longer face a “source of the water” debate after an event.
The nation would benefit because if decisions to live in high risk areas reflect the actual costs, this might result in different land use approaches or shift methods of construction to result in lower risks (high rise multifamily rather than dwellings more prone to flooding).
Granted, there should be a reasonable transition period but it is time to consider letting the market both recognize and charge for the risks.
I can add your comment and not your name if you prefer.
Claire, I have no problem with including my name.