US Taxpayers Face Hit From Flood-Insurance Program Drowning in Debt

September 01 02:51 2017

And, of course, it comes just in time for the unchecked devastation of Hurricane Harvey.

If the communities agree to undertake such steps and join the program, their residents and businesses can then purchase federal flood insurance to protect themselves from losses.

Hundreds of thousands of people live in flood-prone cities like Houston, Miami, New Orleans, Tampa Bay and NY. This has become an even bigger priority as hundreds of thousands of homeowners cope with the flood waters left by Harvey.

As if victims of Hurricane Harvey didn’t have enough to deal with, a Texas law that takes effect September 1 may make it harder for them to sue insurers for payment of claims. “I would vote for a short term extension to prevent the program from lapsing, but I would prefer passage of the SAFE NFIP Act, a bipartisan bill I’ve co-sponsored – that would reform our current system”. 1774 will force claimants to alert insurance companies before a lawsuit can be filed. Now increases are limited to 18 percent to 25 percent, depending on the property.

Federal flood insurance payouts and other disaster relief are not just another form of political pork sent home, like highway dollars fixing potholes. In brief, this standard called for a more cautious approach to construction at the boundaries of flood hazard zones.

The program was created because Congress found out that flood insurance was barely ever available through private insurance companies, according to the legislation.

As Harvey recedes in parts of Texas, affected homeowners are grappling with how to recover from the damages.

“Disaster aid from the federal government is much more limited than I think realize”, says Carolyn Kousky, director of policy research and engagement at the Wharton Risk Center.

“FEMA will likely run out of money before there’s a comprehensive number to address the entirety of the disaster response so immediate action is needed”, said a senior Democratic aide.

“If you have $30,000 in damages, you can get maybe $25,000”, Hunter said.

If consumers believe that an insurer is not meeting the terms of their policy, they should contact the Texas Department of Insurance.

But Florida politicians bristle at the potential for higher rates. A 500-year flood has roughly a 5 percent chance.

Instead of an overhaul, Congress may be forced into simply renewing the program as it stands now.

One of the more glaring components of the bill is a provision which reduces the penalties insurance companies are forced to pay if they’re late in paying out weather-related claims. You may have homeowners in these areas who are filing multiple claims with their different policies. “This development is heavily subsidized with cheap insurance, both by the state (offering cheap wind losses insurance) and by FEMA (for flood losses)”, he wrote.

Over two dozen congressional Republicans, most from coastal districts, balked at Duffy’s proposal.

“That’s where you’re going to have a lot of problems arise with people that do not have the flood insurance and in Georgia it’s less than 1% of the total population that has flood insurance”, he says. If you’re in an area where an evacuation was ordered and you’re now in a hotel, most homeowner’s insurances will have policies to help you get reimbursed.

To say that the NFIP and FEMA have been boondoggles would be an understatement.

Stormy Clouds Over Neighborhood

US Taxpayers Face Hit From Flood-Insurance Program Drowning in Debt
 
 
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