Flood Insurance Thoughts to Consider
While traveling back to Useppa after a meeting of Lead RE Companies of the World, the following article was published in the WSJ. Thanks to Fritz Lehman for alerting us.
Surprisingly, there are a growing number of companies now willing to write flood insurance-and the market for reinsurance is growing as well. As the author points out, the private market is depending on FEMA sharply increasing government rates.
So, as capitalists what do we think of this scenario? The feds want to raise premiums to so-called unsubsidized rates, but those rates are intended to pay off debt caused primarily by the collapse of levees around the city of New Orleans. The levees were the result of inadequate funding to the Corps of Engineers. But FEMA insured all those homes and businesses anyway. Really?
Further, if a private insurer is quoting $5000 vs a FEMA quote of $15000, where does the excess premium go? To pay the debt that belongs to the entire country because the feds did not provide adequate protection to our only city below sea level, which they insured. Hmmm??
Great topic for discussion, when homeowners of modest means (or more) are caught in the middle and will have to decide between paying their mortgage, or paying FEMA flood insurance. Even if one admits that life is not fair, is it fair to have life be unfair and ironic at the same time, because of uncaring or uninformed elected politicians?
Please feel free to share these thoughts, or yours, with your elected official, no matter where you are.
Brian