Opinion by Kip Hansen – 24 March 2021
In response to my essay last week, Sea Level and the Jersey Shore, many readers asked questions and expressed their personal opinions about what is known in the United States as Federal Flood Insurance. More accurately, it is called the National Flood Insurance Program (NFIP). The basic idea is that the Federal Government (our national government) has an insurance that it sells to homeowners in flood risk areas and requires that insurance in support of loans secured by buildings in certain designated flood risk zones (note that this is a government program and thus is nearly infinitely complicated, but that’s the general idea.)
In response to massive losses experienced by the National Flood Insurance Program in recent decades, the US Congress has attempted to pass new laws governing the program to rectify what they see as long-standing problems in the program. The basic flaw each attempts to repair is that the cost of the insurance is deemed too high for lowest value homes and far too low for the highest value homes.
In short, the rich and very-rich build hugely expensive homes in the areas of the most risk – within feet of the pounding waves on Long Island, NY or Montoloking, NJ – and get cut-rate federal flood insurance to cover their losses when their summer mansion is damaged by storms.
The latest attempt to correct this absurdity had been stalled, probably stopped in its tracks, by Senator Chuck Schumer of New York, the Democratic majority leader of the US Senate. The venerable (sic) NY Times carried the story today titled: “Chuck Schumer Stalls Climate Overhaul of Flood Insurance Program”.
Why does he object? The Times says: “The Federal Emergency Management Agency was preparing to announce new rates for federal flood insurance on April 1, so that the prices people pay would more accurately reflect the risks they face. The change would very likely help reduce Americans’ vulnerability to floods and hurricanes by discouraging construction in high-risk areas. But it would also increase insurance costs for some households, making it a tough sell politically.” and, more importantly for Schumer: “The new system would mean steeper rates for some high-value homes, and the southern shore of Long Island includes the Hamptons, which have some of the most expensive real estate in the country.”
These “steeper rates” would apply to those who live in an area where “The average sales price in the Hamptons soared 46% in the quarter to just over $2 million, according to a report from Douglas Elliman and Miller Samuel.” [ source: CNBC ]
But what is the purpose of the National Flood Insurance Program? “…the twofold purposes of the NFIP to share the risk of flood losses through flood insurance and to reduce flood damages by restricting floodplain development”. Part of its very purpose is to make building in flood prone areas, like beach-fronts, prohibitively expensive thus discourage such foolish development.
Those with a real interest in this topic should read the NY Times article.
My view has already been expressed in my opinion piece on the Jersey Shore:
“I don’t think that New Jersey will ever really pass — or if passed, enforce — building restrictions on the rich and super-rich. It is only the middle-classes that will bear the brunt of new restrictive building codes that will, in the end, mean that only the rich and super-rich can afford to ignore the obvious, present-day threats of building homes on ephemeral sandbars – if their beach house gets swept away, insurance will build it back and in the meantime, they can live in their third home in the woods of Vermont or New Hampshire or move temporarily to their condo in the islands. “
The same overall rule applies to Federal Flood Insurance – the rich and super-rich won’t like rate increases, but they can afford them. The poor in this rate change actually get a reduction while the middle class get what looks to me to be a fair and affordable increase – estimated by the Times to be in the range of $20 a month. Power- and influence-hungry politicians will tend to act in their own re-election self-interest and use their positions to shield their rich and super-rich campaign donors from the need to pay their own way and subject themselves to the reasonable regulations the government that imposes on the rest of the population.
Those not well-schooled in the system of government that we have in the United States will not realize that Senator Schumer has no legitimate right, authority or power to interfere with the FEMA plan to adjust rates in the flood insurance program. His doing so is a simple abuse of power and represents malfeasance within FEMA if they comply. Senator Schumer is the one of the two elected senators for the State of New York, and is the Democratic [party] majority leader of the US Senate. The Senate is one-half of the Legislative Branch of the U.S. Federal Government. The Federal Emergency Management Agency, on the other hand, is an agency of the United States Department of Homeland Security, which itself is part of the Executive Branch of the Federal Government, which is headed by the sitting President of the United States.
Neither the US Senate or its Majority Leader have any authority whatever, except by rank political coercion, over any of the agencies that reside in the Executive Branch. Adjustments made to programs operated by FEMA in the public interest are not legally subject to control by the objections of single US Senator.
Oh, did I mention politics? What are the politics of these people – rich and very rich donors to political candidates running for federal offices – that the good Senator Schumer from New York is protecting from steeper flood insurance rates? Those blue areas – The Hamptons.
Note: Politically active citizens in the United States can express their displeasure (or pleasure) by writing to their representatives in Congress – in this or any other topic that interests them. To email your representative in the House, use this link and supply your zip code. The name and email function (as an envelope icon) appear on the left. For your US Senators, the US Senate contact page helps you search for your Senator (and then gives postal mail addresses and phone numbers, along with a “contact” link, which, if you are lucky, leads to an email functionality).
So, if you wonder why these long-standing idiocies continue – such as repeatedly rebuilding the homes of millionaires built in the riskiest places in the country at Federal expense (meaning, using your tax money) — the answer is simple: POLITICS AS USUAL.
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Authors Comment:
The above represents my personal opinion and in no way reflective of the opinions or political positions of the owners and operators of this web site, including but not restricted to, Anthony Watts. The posting of this Opinion Essay here does not imply their agreement with my expressed opinions.
Government is hard – and as Mark Twain quipped – expensive. “I think I can say, and say with pride, that we have some legislatures [and legislators – kh] that bring higher prices than any in the world.”
Thus, we will continue to pay for the greed of land developers in Texas that build hundreds of homes in harm’s way on known flood plains and the self-indulgence of the rich who just must have a multi-million-dollar summer home on the beach.
Starting comments with my name – “Kip …” will insure I see them if you are talking to me.
Thanks for reading.
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Right on, Kip! The Democrats want the money from the rich and the votes from the poor, and they don’t care if they have two different messages. Chucky Schu knows he better get as much done as possible, because the 2022 mid-terms might be brutal.
Ron ==> Democrats or Republicans — they are of the same ilk. A quote wrongly credited to Mark Twain, with which I agree: “Politicians are like diapers, they need to be changed often, and for the same reasons.”
Just look at Trump Russia colluuuusion…there were many Republicans who wanted him out. Birds of a feather flock together.
We have the same issue here in Canada. Two main parties (at least we have more than two), but as I say, the only two differences are that one uses the colour red, the other blue, and when one is in power, the other is in Opposition (capitalized deliberately, as its a parliamentary thing).
Just this week the new leader of the Blue Party (they call themselves Conservative, but aren’t very conservative) drank hard of the climate alarmism Kool-Aid, fearing doing anything else would allow political opponents to paint the entire party as being “climate denial loons”.
I’m currently writing him a brief note thanking him for being clear, direct and being a strong leader, and that I’ve never been more sure of voting for another party now than I ever have.
Oh, and when as a conservative I preach against socialism, I don’t mean welfare or other budget items that might actually help at least some of the poor, or shared infrastructure that helps build a decent society.
No, I mean cheap flood insurance for liberal billionaires.
When those on the left understand that, we might make some progress. Until then…well, goddess help our great-grandchildren, and their great-grand kids, who will be paying the bills.
C.J. ==> Sorry to hear that “O, Canada” suffers the same quirk. . . the flood insurance plan probably sounded good and was intended to help the common man when the rivers rose. Insuring the first quarter mil only reduces the overall insurance cost of the very rich, who then have to tap into whatever disaster relief scheme the government offers.
I’m with you on those “blues.” Last time I couldn’t decide who to vote for so actually voted Green but that was before I discovered sites as Paul Heller’s and WUWT. Next time I’m really stuck, might as well vote my blue guy who’s here perpetually representing this rural Manitoba riding. At least writing in our local paper he’s been very critical of Turdeau!
YOU MEAN….THAT DEMRATS ARE GONNA TAX ZUCK AFTER HE SPENT $200 MILL TO GET THEM CROOKEDLY ELECTED?
I’m not sure what the problem is here. The laws that get passed are by representatives we elect. If we don’t like the laws, elect someone else. The poor, minorities and lower middle class vote Democratic and Sen. Schumer is a Democrat. If they think they are getting the wrong end it’s their own fault. The same holds true with energy poverty. Renewables are going to double energy prices and it’s by policies put in place by the people they support.
rbabcock ==> As I told Senator Schumer when I wrote to him: as a senator, he has every right, in fact a responsibility, to propose new laws that change the National Flood Insurance Program.
But he has no right, no authority to interfere with the operation of FEMA and its plan to change the rates for the NFIP, which it has spent years working on through the rules and regulations governing changes in rules for US agencies.
He is committing what would be a CRIME in the outside world — “The statutory definition of coercion is fairly uniform among the states: the use of intimidation or threats to force (or prevent) someone to do something they have a legal right to do (or not to do).” In this case, he is implicitly using the threat of withholding future funding to FEMA in future appropriations bills.
This is something that has always bugged me, the same crooks keep being re-elected and they keep serving themselves first and their constituents last, after all the special interests that pay them off! People don’t seem to get it that the only reason anyone goes into politics these days is to get rich or richer! Why else spend millions to get a job that pays only 174K/year?
Pamela ==> One reader noted that Barrack Obama recently bought a 15 million dollar property on Martha’s Vineyard. He was a city councilman in Chicago (?), never a businessman — where did he get an extra $15 million for a summer home?
If one web-searches for Chuck Schumer’s “net worth” you find estimates of 800,000 to 1.5 million. I hate to say it, but even the plain upper-middle class in the USA has similar net worth. I suspect that he is hiding his wealth somewhere — the most usual is in property and accounts in the name of a spouse instead of his own name.
“ I suspect that he is hiding his wealth somewhere — the most usual is in property and accounts in the name of a spouse instead of his own name.”
Chuck is probably poor like Bernie 😉
Derg ==> Poor like that city councilman from Chicago — Obama something?
Correction: Obama’s Martha’s Vineyard property only cost $ 11.4 million.
Supposedly Obama did Netflix some favors and they showered him with millions.
millionaires are not the only people that live on the coast….there are businesses and people with those businesses that have to live there too
..and they are not millionaires because they earned more money….they are millionaires because their damn property values went up so much….they are still making the same money..bringing home less because the cost of everything else is going up
yeah…learn to code
Latitude ==> The FEMA changes to the Flood Insurance rates would lower the costs of insurance for the lowest value properties, make mild increases to mid-value properties, and raise the rates for very high value properties.
“Learn to code” is something that snarky journalists used to tell to actual skilled, blue collar laborers like coal miners. Who, through no fault of their own, ended up losing their jobs due to a certain administration. It was cool, and funny to say that to those people, on Twitter in 2012.
In 2019, when the same snarky journalists get laid off, and their twitter followers tell them to “learn to code” is a malicious, harassing term, that will not be tolerated by Twitter’s terms of service and then result be a ban-able offense with zero tolerance.
I thnk lattitude missed your whole point.
G’Day SteveS,
“Learn to code” goes back well beyond 2012.
When all but one sawmill in Roseburg Oregon were closed down in the mid 1990’s due to the “Spotted Owl” fiasco, that was exactly what the Federal Government offered to the laid-off workers – “We’ll send you to school to learn to code”. I got that from a young (married, two children) laid-off worker.
They were in Diamond Lake Campground – I was a volunteer Camp Host. We sat and talked for about 15 minutes. He admitted that he was in the mountains to poach a deer, to put meat on the table for his family. (I did mention that to my Supervisor – a couple of weeks later.)
Gabby ==> Hope you waited to mention it until after he got his deer and went home.
SteveS ==> Thanks — I am sometimes a bit behind on my ad hom snarky lingo.
Funny thing is that I earned my early retirement — at 52 — doing just that – coding for IBM on their Sports and Olympic Web Team.
Latitude ==> Just curious — what does “learn to code” mean to you?
Not mentioned, there is a $250;000 cap which limits the level of flood insurance coverage on the structure, so I don’t get the discussion about expensive homes. The cap is $100,000 on contents.
Of course other incentives may be offered to raise re builds. In Nj one must raise new and rebuilds which I agree with.
My NJ home on the bay had the classification changed even thouugh I had zero water damage.
“
Catcracking ==> I can only specifically speak to Senator Schumer’s public comments regarding his reasons for opposing the FEMA rate changes.
Location, location, location… My house is on a decent sized lot, ~2,500 sq. ft. Being right next to the air base, though, the lot value is (high estimate, I have no vacant residential lots near enough for comparison) maybe a third of the total property value.
Move this house to the same sized lot up in the foothills, though, and that ratio would more than flip the opposite way. Vacant lots this size up there are more than my <i>total</i> property value.
Someone in the Hamptons (or Martha’s Vinyard, or several dozen other “high priced” places) could have their house totally destroyed, and not lose even 10% of their property value. Probably not replace everything for $350K – but a very large part of it.
W.O. ==> When property values get that high, it is almost always the location they are paying for. Many old farm houses and old beach houses on Long Island were purchased for astronomical prices and those lovely old homes bulldozed and replaced by tasteless McMansions.
A valid point, if the cap was actually enforced. What happens in reality is that any kind of major weather event will damage multiple homes, the governor can then declare a “disaster” and expect with confidence that the federal government will pay for all the losses. Since the states benefit financially from the irresponsible development they have no incentive to change. And any president that refused to help the state would be destroyed in the media.
Mean ==> Disaster relief that actually happens is probably better than nothing but is seldom what those suffering loses would have hoped for.
You are right — wealthy developers are major political donors and the Golden Rule applies.
Is there coverage under FEMA for tornado damage? A big tornado touched down in Appomattox County, Virginia, and passed within half a km of our farm. We had zero damage and got to see the thing up close and personal. However, my neighbors who lost barns and homes claim they were never reimbursed for their loses.
Pamela ==> There is no Federal Tornado Insurance program for Tornadoes. Private property insurance usually covers windstorms.
See here.
I know that some people only got the cap limit in NJ which is $250,000 .
They are very wealthy and paid the excess themselves.
I have insurance covering only the cap which probably OK for the structure although the property itself is not covered if it washed away which is unlikely since the only damage I had was wind with loose shingles.
Since the cap is in my policy That is real and discussion about expensive homes at higher rates escape me.
.
Speaking of Mark Twain, I recently saw a comment where someone invoked this quote from Mark Twain’s “Roughing It” (observing a coyote) as it applied to Justin Trudeau –
“He is so spiritless and cowardly that even while his exposed teeth are pretending a threat, the rest of his face is apologizing for it.”
OUCH!
Kip, your followup is as good as your original post.
As someone who by choice lives directly on the Atlantic on the north Fort Lauderdale barrier island beach abutting its beautiful coral reefs, east of the Intercoastal, east of A1A (albeit all a lot more substantially elevated by dunes than NJ), I completely agree. My choice, I pay. Not you.
BTW, I am on the 12th floor of a reinforced concrete building built in 1998 with foundations 40’ down into bedrock, with ‘windows’ that can withstand a 150 mph Hurricane Andrew (sliding doors are set into >1/8 inch aluminum extrusion plates anchored top and bottom by two bolts every 18 inches into the reinforced concrete, very heavy, with 6 inch high ‘toe stubber’ vertical 1/8 inch thick drain plates all across the floors—which sometimes still flood a bit into the place when the rain and wind really beat directly on the face because they cannot drain fast enough against the wind).
Didn’t even buy interior condo hurricane insurance—was too expensive; exterior is covered by the building quarterly fees.
Been here 21 years and survived at least one cat 3 direct hit hurricane (Wilma) and several local Cat 2s like Katrina or recently Irma. So far, so good. If Cat 4-5 threatens a direct hit, our bug out bag with 7 days of food, water, and batteries plus AWD Hybrid Escape small SUV will always be prepped to make it on one extra tank of gas to our north Georgia mountain cabin getaway 750 miles away. Wise, not foolish.
Rud Istvan ==> Yes, living in a modern “hurricane proof” condo building, properly built and furnished with deep foundations is safe and wise enough — like my wife and I on our boat, with a well-thought out hurricane plan and “ditch bags” (reminds me of my intelligence training, a lifetime ago — we still keep stacks of cash and necessary papers ready to go @ a moments notice). North Georgia mountains are a nice “safe harbor”.
Ft. Lauderdale beach is not a barrier island. Rather it is a mainland beach that was cut off by the construction of the Intracoastal Waterway. I discovered this back in the ’80s when I was mapping the Florida coast using stereo pairs from the 1920s. It was very obvious that these are not islands in the geological/geomorphological sense of the word. True barrier islands, like the NJ barriers and the Outer Banks behave quite differently from the way south Florida beaches do.
Pamela ==> Thank you for that tidbit….I tried to quickly look up the altitude of “north Fort Lauderdale” but it was too broad a description. I did not find any barrier island geographically there. I have sailed past it many times in the Intracoastal.
I lived in Ft. Lauderdale for over a decade and am fairly familiar with Florida, the Glades, the ICW, Keys. There is a lot that is really nice about Florida. I still have family there but they now prefer to visit me in Europe, it is more exotic.
Pamela => My wife and I were in Porto, Lisbon, Madeira and the Bay of Biscay ports of Spain for s couple of years when we were first together. Lovely lovely lovely.
Anything the dishonest Schumer is either for or against, you can bet the opposite is what is in the general best interest of the average US citizen and upholding the US constitution. The adjective “sleaze” doesn’t even begin to describe Schumer.
Joel O’Bryan ==> You a New Yorker? or just a well-informed US citizen?
Lived in Massachusetts for almost 9 years. I saw lots of liberal-elitist political sleaze while there. I live in AZ now but spend lots of time traveling around western US these days with my travel trailer and dogs. Lots of time in Texas. Right now enjoying Mustang Island/Port Aransas nice beach weather the moment RV, 200 yards from the waves breaking. Lot of GoM beach time the last few days, but I can’t seem to find that worrisome SLR the Leftists keep yammering about.
Joel ==> re: SLR — Nils-Axel Mörner searched for it for a lifetime and barely found any — so don’t feel bad.
Oh, sorry. I read SLR as Self Loading Rifle, which we in the UK armed forces knew it as. My apologies (and as you might get yours stolen as ours were, DON’T TELL!)
Disputin ==> The movement of military weapons into the general civilian population is a problem worldwide — and almost always swept under the rug.
Kip – no need to fret about the movement of military weapons into the general civilian population as the Democrats have a plan to fix that. In fact, I understand that the Democrats believe they can fix everything – now that really IS worrying!
Richard ==> The latest administration scares me too.
Amen, Kip. Niklas never stopped looking, either, right up to the end. My very best field experiences were working at his side measuring beach elevations and poking around rock cut platforms.
Pamela ==> I miss his occasional additions to our cumulative human knowledge about the physical world around us. A true Scientist in the very best tradition.
As an Australian infrastructure engineer I’m not really sure about US flood insurance, but it was my understanding that one of the key goals was accurately flood map locations to provide a better risk assessment, which would then lead to an overall premium reduction.
Consider
A. People who live in actual flood zone and currently pay insurance.
B. People who live in actual flood zone but don’t pay insurance.
C. People who DON’T live in a flood zone but pay insurance.
D. People who don’t live in a flood zone and don’t pay insurance.
Better flood mapping means C pays less and B pays more but the better understanding of risk reduces the overall cost to the entire community.
BUT BUT BUT!!!!
Alarmists aim to legislate that due to SLR more people will now be subject to inundation so need to pay compulsory insurance.
Waza ==> You are correct about the overall intention of the plan, including new flood zone maps, which have been compiled. The next part of the plan was to encurage localities to make appropriate changes to local zoning codes prohibiting or limiting building in these zone and/or establishing codes like eight-foot foundations raising living quarters far above expected flooding (these usually have garage space on the ground level with living above.)
It is not just sea level rise and inundation by the sea and tides, but flood zones everywhere due to the inevitable occasional (once a decade) flooding of rivers and creeks and lakes.
The rates Schumer is opposing are the implementation of “Better flood mapping means C pays less and B pays more but the better understanding of risk reduces the overall cost to the entire community.”
The problem with the argument is that there NFIP policies have a coverage limit of $250,000. That is not very much in the Hamptons. Not with construction costs in excess of $400/sq.ft. Private insurance to provide real coverage is very pricey. It would probably be unavailable without the NFIP policies as a base, but still.
Like the Obamas buying a $15M property on Martha’s Vineyard, if they can afford those multimillion dollar prices, and the huge annual property tax bills that go with that property valuation, then if they lose it all in a hurricane surge-flood, that is their problem IMO, not the taxpayers.
Walter ==> If you have a federally insured bank loan (mortgage) for your home or building, and it is in a FEMA Flood Zone (details matter), you are REQUIRED to have Flood Insurance. The National Flood Insurance Program provides the minimum insurance required, covering the first $250,000 for the building and $100,000 for contents.
So, almost every home we are talking about has that minimum coverage unless they own their home outright with no mortgage — it is a requirement. Those with homes of higher vales can buy more insurance “Through the NFIP the maximum building coverage provided is $250,000. If the replacement cost for your property is more than that amount you would need to purchase an excess coverage policy to have full coverage.” [ source ]
If your home, like any of mine would be, you need less coverage from the NFIP and pay less, and have no need for excess coverage.
Since NFIP is relatively cheap compared to private insurance, high-value home owners generally take the NFIP insurance and supplement it with private insurance to cover the additional millions replacing their mansion would cost. Their private “excess coverage” cost is always reduced because the Federal Program covers the first $350,000 — almost any damage to a multi-million dollar property requires the full payout from the NFIP — then the private insurance starts paying the excess costs.
So when disaster strikes millionaire row in the Hamptons or Montoloking or the outer banks of the Carolinas, the NFIP pays out the first quarter million plus an extra $100,000 for the golf clubs and bespoke Italian suits and the misses Paris fashion-house dresses.
The FEMA rate raise is intended to have those who will always need the full amount — due to property value and risk — and see that these people pay their fair share based on standard insurance company practice.
“…the twofold purposes of the NFIP to share the risk of flood losses through flood insurance and to reduce flood damages by restricting floodplain development”.
OK. Now we see that the NFIP is an incoherent policy. It purports to want to eliminate risky development, but then *offers insurance* against said risks. Utterly incoherent.
Then we have this:
“Part of its very purpose is to make building in flood prone areas, like beach-fronts, prohibitively expensive thus discourage such foolish development.”
Not the government’s job. Period!
Get out of the business.
We also have this gem:
“The basic idea is that the Federal Government (our national government) has an insurance that it sells to homeowners in flood risk areas and requires that insurance in support of loans”
Oh how nice. The government offers a product for sale, then compels you to buy it. Nice racket if you can get one. But What Could Go Wrong?
The Solution in one easy step:
Sunset the damned NFIP.
Do not want people to build in high risk areas, stop offering the insurance which subsidizes it. Just stop.
Private banks will underwrite the mortgages, or not.
Private banks will require flood insurance, or not.
Private insurance companies will issue policies, or not.
No heavy handed Govt. policies required. And they are out of a business they have no right to be in, in the first place.
Shot – Chaser:
What else could go wrong? This:
“The latest attempt to correct this absurdity had been stalled, probably stopped in its tracks, by Senator Chuck Schumer of New York, the Democratic majority leader of the US Senate.”
The NFIP is a flat out subsidy to the rich paid for by the middle class. Everybody who has even glanced at the numbers knows this. And it has been this way for decades.
Disclaimer:
I have up close and personal experience with homes getting reclassified as higher risk and getting clobbered with compulsory rate increases. Problem was, the homes were well above any ponds or rivers locally and under no rational risk of flooding. Also ~50 miles from the coast. We thought then (~2013 or so) it was a cash grab to finance expensive real estate like the Hamptons.
Note to Kip Hansen:
I think we disagree sharply on policy prescriptions, but that is fine.
My compliments on some well presented articles which set out the issues clearly and fairly.
TonyL ==> I actually haven’t really offered any prescription on Flood Insurance Policy other than that Chuck Schumer should cease and desist trying to order FEMA not to make rate changes. My position on the Barrier Island massacre is that these islands should be allowed to “undevelop” themselves as nature wipes out the existing communities one by one over the next century.
In the meantime, I suppose small business owners and the middle class can have affordable flood insurance as long as the plan includes phasing out developments in high risk areas over time.
But, hey, Opinions Vary as they say.
Thanks for reading — there are many that don’t actually read through the essays but fire off comments based on the title or the lede.
A number of caveats are missed.
1) Flood insurance is flood insurance!
2) A hurricane rips through, takes off the roof; rain destroys the walls and a flood damages what is left of the house and contents?
From FEMA:
3) There are substantial limits to flood insurance coverage, no matter what the building or contents cost!
From the FEMA site:
Got a million dollar house destroyed by flooding? Tough. You get a maximum of $250,000 building coverage.
4) Ask the residents who suffered flood damage from hurricane Katrina in Louisiana and Mississippi about how effective/efficient FEMA was at awarding flood claims…
FEMA spent millions collecting and loosing applications.
I believe it took three years before FEMA finally paid their first claims.
5) If you live in an area where floods might occur, e.g. a flood plain, mortgage companies under Federal law require flood insurance coverage.
Having flood insurance does not mean you will receive flood coverage!
From FEMA:
Yes, there is a plan to revamp Flood Insurance. Schumer is not blocking the revamp solely because owners of million dollar houses will have to pay more insurance premiums to get the same levels of coverage they had previously.
Property owners will pay substantially more in insurance premiums depending upon risk and the values to be covered! Part of the Flood Insurance revamp intent is to force owners to stop building in areas with ridiculously high flood risk or face exorbitant insurance premiums.
Only the wealthiest people will be able to maintain property in high risk flood zones. All others will be forced out by exorbitant insurance premiums.
In past times, waterfront and flood plains used to be inexpensive locations where the poor could live. Going forward the poor will be forced to relocate and relinquish desirable waterfront and river valleys to the wealthy.
ATheoK ==> Hey, now, I’m not selling this insurance you know. You don’t like the insurance, don’t buy it.
You want a different Federal Program, write your Congressman/woman/person and Senators. I provide the links and instructions on how to do so.
The FEMA NFIP insurance is not disaster insurance, it is not hurricane insurance, it is not hailstorm insurance, it is not tornado insurance.
It is specifically and only Flood Insurance.
All the loses you complain about, those that are not covered by Federal Flood Insurance, should be covered by your Homeowner’s Insurance Policy — if not, see your insurance agent and get a better policy. A primer on Homeowner’s Insurance can be found here.
You seem to have conflated the NFIP (flood insurance) with FEMA Disaster Relief, which is a different program.
The proposed FEMA rate changes lower costs for the lower-end-value properties, raise premiums a bit ($20/mo) for the middle, and only substantially raise the premiums for top-tier properties.
“In past times, waterfront and flood plains used to be inexpensive locations where the poor could live. Going forward the poor will be forced to relocate and relinquish desirable waterfront and river valleys to the wealthy.” Lower flood insurance rates for the poor won’t cause them to relocate. But, yes, in the past a disaster like The Great Flood of 1927 wiped out the homes of hundreds of thousands of the poor. You can’t possibly be advocating that we return to allowing the poor to build shantytowns, cheap homes, in flood zones only to have them be wiped out over and over.
I do get that you are not a fan of FEMA’s NFIP.
I’ve mentioned more than once on these pages that I live on the water near Galveston. I want to reiterate an important point mentioned by Catcracking below: FEDERAL FLOOD INSURANCE HAS A $250,000 LIMIT. Even here where I am, where property values are not at all high, that does not buy anything close to a mansion. Those rich people on the Jersey Shore are self-insured. If they can afford it good for them. If a private insurance company has agreed to insure them, I’m sure the company has calculated the risk and charged accordingly. You might even come to think the federal flood insurance program is helping the lower and middle classes who live and work near the coast, as intended.
Nothing to see here.
David ==> You need to check the local banks for information on how many properties are covered in part by the NFIP. As in most high risk insurance coverage, there are multiple layers of insurance — for homes in flood zones, this includes NFIP with excess coverage from private insurance, both specifically for flood damage and wrapped up in Homeowner’s policies.
It is so important that the Democratic Majority Leader of the US Senate felt he hd to take a public stance against the rate change by FEMA. That is not “Nothing to see here”. And his reason for doing so? The Hamptons.
Since the cap is 250,000 dollars, I don’t see how one soaks the rich unless the cap is also changed.
I am more concerned about unrealistically changing the flood classifications or trying to arbitrarily ban construction or use with exaggerated sea level rise claims by zealots.
In the most vulnerable areas in NJ the living portions of the structure is required to be elevated and the lower level is not covered by insurance and is designed to tolerate flooding.
If people want to live in these conditions the government should have no say.
If you look around the NJ barrier islands and coastal areas every availble plot is being built up with elevated construction today.
Are they going to ban this?
BTW there has been discussion of Mantoloking in NJ which flooded badly because of a breach in the offshore barrier island because there was a rare combination of a lingering, extended NE storm that was topped up by a sub hurricane storm , Sandy. Sandy alone would not have had such a significant impact.
I believe this is a rare combination.
Even so I had no flooding in my lagoon home off the same Barnegat Bay, not close to the breach.
Cat ==> I think the new codes, which seem to be being applied up and down the East Coast include elevating the living quarters above some pre-set (FEMA determined?) height. Often an eight floor high garage with the rest of the house on top.
That seems to be what I see all along the barrier islands and coast of NJ.
It is tough for us old folks with bad knees.
My lagoon front home is on the mainland side of the Bay built in the late 80″s not on stilts and never flooded, but Sandy was very close as a lingering NE storm had already pushed up sea levels which were further raised by Sandy.
Many others were less fortunate than I was.
Those not well-schooled in the system of government that we have in the United States will not realize that Senator Schumer has no legitimate right, authority or power to interfere with the FEMA plan
I think Schumer is an imbecile, but Congress indeed has the right to “interfere” in FEMA. The agencies of the executive branch under the direction of the President are formed to execute and administer the laws (“regulations”) passed by the legislative branch, which is Congress. In fact, the executive branch agencies have never been given legislative (rulemaking) power by the Constitution. That’s a power that has been ceded by Congress over time to those agencies for administrative convenience and upheld by (wrong) Supreme Court rulings, but nowhere in the Constitution will you find the executive branch has the power to make rules (laws). That resides solely with Congress, which is the place to debate those rules, where our representatives are (supposed to be) more accountable to their constituents.
stinkerp ==> This is an ongoing argument but the basics are quite clear. Legislative Branch makes laws and the Executive Branch carries them our, enforces them, and to do so, must be able to figure out how that is to be done — which means rules.
Congress only has the right to pass NEW laws if they don’t like how their existing law is being carried out. They can pass new laws to clarify the old law or to force the Executive Branch (agencies etc) to enforce them in a specific way.
The Legislature and Legislators cannot and must not involve themselves in the daily operations of the Executive under the basic principles of separation of powers.
Many Federal agencies have had a tendency to overstep the boundaries of their authority and make “new law” through the rule making process. This is part of the give-and-take of the American system.
I think if you look in Article I, Section 8 at the enumerated powers of the Congress, you will be hard pressed to find any hint of a right to force people to buy flood insurance. There is much room for interpretation and if Congress makes a law giving authority to an Executive department to manage a task, that department has the right to make whatever rules are necessary to satisfy the law. Setting insurance rates would certainly not be included in any law but are required to execute the law.
Trying ==> I am in no way trying to justify or promote this or any other Federal Program…just writing about it. You are right on with your view on the necessity for executive agencies to make rules to enforce laws passed by Congress.
The required insurance is tied to Federally insured bank loans….it is complicated.
Meanwhile the ghastly and terrible effects of climate change just keep rolling in.
Now Uluru (Ayers Rock) in Australia gets rained on forming streams, pools and waterfalls:
https://www.bbc.com/news/av/world-australia-56506799
Anyone still doubting that climate change imminently threatens the life of every human on earth should take a look at that horrifying video.
The reaction of shock and horror of the tourists caught up in this climate disaster is clear and understandable. It’s worse than we thought. We don’t think of course, but it’s still worse.
/sarc
And it must have happened a “few” times before, judging from the erosion.
The Federal Flood Insurance Program is simply one more in a long line of Big Government boondoggles.
It is insane.
The only proper solution is to get the bloody damn Big Government out of a business it shouldn’t be in in the first place. What at the odds of that happening? Slim and none.
I’ve spent the past month just south of Mexico Beach in the Florida panhandle, and famous for its encounter with hurricane Micheal in 2018. What is striking is seeing all the stilts with nothing on them. There are many houses and condos that are still sitting empty because of wind damage. A drive through Tyndall AFB is even more striking, there are thousands of acres of open fields where forest used to be. I wandered around on Zillow and the stuff that has been rebuilt and is for sale is two, or more, times the price of what used to be there. What is baffling is that anything is being rebuilt, Michael has siblings that are going to come visit anytime they want.
Yooper ==> Humans, apparently, have a hard time learning from reality.
There should be no insurance available to people who build on floodprone areas.
Agreed. Remove the necessity for homes to be insured where the builders/homeowners have built in unwise/dangerous locations and see if the practice continues.
For an added bonus – make available subsidies for homes built on slopes above the flood level (building homes on slopes is more complicated and expensive so is rarely done where there’s a nice flat flood-plain nearby).
Kip, a small quibble. It’s “Mantoloking” not “Montoloking”.
And, not to cause thread drift, the flood insurance program isn’t confined to the coastal areas. A tributary of the Raritan River runs through my town. Some folks out on “The Flats” are required to have flood insurance, even though we are 350 feet above sea level.
D. J. ==> My spell checker has become sneaky — if I mis-spell something more than once it happily accepts my erroneous judgement.
Yes, I mention that several times in comments — we are down this sea level path because we started with Sea Level and the Jersey Shore.
“The Federal Emergency Management Agency was preparing to announce new rates for federal flood insurance on April 1, so that the prices people pay would more accurately reflect the risks they face.”
Um, the whole point of the government program was to charge rates that did not accurately reflect the risks people faced. If the government were to charge rates that accurately reflected the risks, there’d be no need for the government program. The government program only exists because people found the accurately reflected rates offered by the insurance industry unpalatable and demanded the government do something.
John the Econ ==> Aell,the whole purpose of inurance in general is to spread the financial risk across a large number of people/companies/etc. Thus, each chipping in a small amount can be insurance against large, but rare, loses. The NFIP was intended to make flood insurance affordable and protect loans made against the properties at risk. As in all insurance, the larger the pool of insured the lower the rates can be for all.
The new rates are intended to even out the inputs (rates) of the program against the likelihood of payouts. Those more likely to max out the payouts are intended to pay more than those unlikely to do so.
Correction: Well, the whole purpose of insurance…
Yes, I understand the purpose of insurance. My point was that the fact that flood insurance was “unaffordable” before the government altered the market suggests that the risk involved in owning a property in particular locations was greater than people were willing to bear, and then perhaps they shouldn’t have been there in the first place if they were unable or unwilling to afford the risk. Yes, spreading the risk to taxpayers in general certainly does make it more affordable for individual landowners, but is hardly fair to those of us who live in safer locations and don’t get to enjoy in beachfront properties.
HJohn ==> Part of it was hat the FEds wanted to protect the banks who gave the loans….
As you said, spreading the risk.
Until about 2004, the taxpayers didn’t have to put up a nickel. Apparently Hurricane Katrina and Tropical Storm Sandy generated losses way beyond the actuarial boundaries. Regularizing the rates to make it self-sustaining again seems only prudent and just. Part of the loans to cover the gap were forgiven by Congress in 2017, to the tune of $16 billion. The program currently owes about $20 billion in loans.
And even bigger question needs to be asked:
Why is the Federal Government involved in flood insurance in the first place? For utilities which benefits massive swaths of people all over large geographic areas, OK. For individual homes in specific towns or hamlets?
Why do we need Federally-backed flood insurance?
Shanghai Dan ==> See the wiki on this question. https://en.wikipedia.org/wiki/National_Flood_Insurance_Program The article gives the history of the NFIP.
By the way, does Upchuck Schumer have a house in the Hamptons?
Steve ==> No, he lives in Brooklyn : https://celebanswers.com/where-does-chuck-schumer-live/