July 31, 2014,
I & E Insurance Agency 2900 Route 88 Point Pleasant NJ 08742
Flood Insurance – more problems !
Kicking the Can down the road AGAIN—and leaving more debt to Our Children?
Over 46 years ago, the US Congress created the National Flood Insurance Program (NFIP) NFIP
to provide property owners the ability to protect themselves. The NFIP offers insurance to property owners, renters and
businesses if their community participates in the NFIP program, if their community adheres to the rules and regulations
that the NFIP setup. These communities obviously have to adopt and enforce ordinances that meet or exceed
FEMA requirements to reduce the risk of flooding.
Months after Hurricane Sandy hit the eastern seaboard hard and caused wide spread losses, property owners were
outraged that insurance was inadequate and that the price of flood insurance was moving higher. Most of the noise
came from people who neglected flood insurance. We see it all the time- people want homes on the water but
when given the opportunity to get flood insurance-they balk at the price and reply “ We've never had a flood,
or its’ too expensive” --- the reality ---If it happens just once, where will you be? You only die once.
Insurance is the peace of mind that allows you to start over minimizing the financial burden of a catastrophe.
How can you put a price on that? Yet most people view it as a waste of money. Obviously this writer doesn’t see it
that way, as we’ve helped more than our share of property owners and families start over. After the hurricane,
these same people cried where’s my flood insurance and why didn’t you make me get flood insurance? We can’t make
people do anything. I ask where is the sense of personal responsibility. If you own a home near any water, the beach
on a bulk head ---The potential for flood is REAL- it’s just a question of where and when.
Floods can occur anywhere, we’ve even seen it in California even where a serious water shortage has occurred.
Recently a water main broke, flooding the Campus of UCLA. just wait for the lawsuits--- who will pay for the monumental
costs of repairs? University officials say Costs due to the ruptured water main should be paid by the
Los Angeles Department of Water and Power - “We believe all costs associated with this incident should be borne by the
DWP; they weren’t our pipes,” said UCLA spokeswoman Carol Stogsdill. But after all the lawsuits and politics, we know the truth,
The real cost of this flood will be borne by the taxpayers of California. So the buck gets passed again!
But with Proper risk management a flood policy could have been secured by an independent Insurance company.
Did School officials and
ever think about that? Doubtful...
Politicians think Government solves all...
Recently the president and Congress signed into law a bipartisan bill that reduced the cost of flood insurance that
homeowners living in flood-prone neighborhoods were facing from the increases scheduled due to the law reformed in 2012.
This new 2014 legislation reversed the majority of the 2012 overhaul of the government's much-criticized flood insurance
program after angry homeowners facing sharp increases protested. The bill scales back big flood insurance premium
increases and also allows below-market insurance rates to be passed on to people buying homes in flood zones with
Once again Congresses has kicked the can down the road, and who pays for it. We all do… The American tax payer is
now paying for the people who have decided to live in areas pruned to flooding, and didn’t want to pay for it.
The responsibility has been passed onto all of us, and then people wonder why our system is broken, our country
broke and taxes increasing… Critics say Washington is caving in to political pressure. "While politically expedient today,
this abdication of responsibility by Congress is going to come back and bite them and taxpayers when the next
disaster strikes," said Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based watchdog group.
"Everyone knows this program is not fiscally sound or even viable in the near term."
The 2012 rewrite of the flood program was set to correct and reduce the subsidies that the federal flood insurance
program permitted. It also required extensive updating of the flood maps used to set premiums.
But once again “NOT IN MY BACK YARD” attitude was expressed as many homeowners along the Atlantic and Gulf
coasts complained when threatened with increases. Most of the properties originally were built to code but later were at
heightening risks due to re-evaluation; and were found to be at greater flood risk. These "grandfathered" homeowners are
benefiting from below-market rates subsidized by other policyholders. The new legislation preserves that status and caps
premium increases at 18 percent a year. The 2012 overhaul Bill required premiums to increase over five years,
as in the 5th year the price of the insurance would be appropriately priced.
Then there was the payoff to the real estate industry, allowing home sellers to pass the taxpayer-subsidized policies to the next generation of buyers instead of requiring the NEW purchasers to pay the actuarially sound rates now, as required by the 2012 law. People whose second home is in a flood zone and those whose properties have flooded repeatedly would continue to see their premiums go up by 25 percent a year until reaching a level consistent with their real risk of flooding.
"While it is important to put this program on sound financial footing, middle-class families should be able to afford the
insurance they need to stay in their homes," White House spokesman Bobby Whithorne said. Several critics of the law have
come out. "We've solved a very short-term problem and made it a long-term problem," said Sen. Tom Coburn, R-Okla.
"We didn't really do our work because we were in such a hurry to take the political pressure off of the increases in the flood
insurance rates." Once again the can was kicked down the road and the debt piles on, all we need is another major flood
and the system will collapse. Many of Our governmental programs like social security and Obama care are focused
on short term remedies and not the long term problem. That would be too hard, that would require truth, honesty,
hard choices and pain
The problem with all this---NO ONE really wants to pay for the problem--no one tells the truth, politicians only care
about re-reelections and the public for the most part is completely uninformed and not interested in the truth-
Our problems go way beyond Flood Insurance--- they include Apathy, Drugs, Foreign Policy, IMMIGRATION, Leadership,
TAXES, Terrorism, RUSSIA, the IRS, ---
Ultimately--- the real problem--- in a word---POLITICS…