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Exactly. And they were valuable, and people lived there, before federal flood insurance. And they will remain valuable, and people will continue to live there, in the absence of federal flood insurance.
I have small home in area that was just flooded, it's like a 40 year event for it to get flooded. We didn't have insurance because it was vacant and small. What we saved not paying for insurance more than covered the damages. The point I'm getting at is that house lost half it's value after that flood, I couldn't imagine what it would be if insurance wasn't available.
There is massive amount of communities, business's and infrastructure in flood zones for historical and practical purposes. They were built on waterways for obvious reasons.
This point is obvious, clear, and I don't disagree.
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That said the subsidized insurance should be phased out and the way you do that is grandfather all existing structures, note I said structures and not homeowner. You give them a one shot deal on the insurance, once they collect the structure is no longer eligible for subsidized insurance.
Private insurance companies won't offer flood insurance and some people are going to have little choice but to live in flood-prone areas.
They can move.
Greyhound.....look into it.
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Originally Posted by TaxPhd
How do you figure?
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Originally Posted by Votre_Chef
Because a lot of economic activity occurs there.
That is not a valid reason, and when costs exceed revenues, then it becomes a fail.
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Originally Posted by Votre_Chef
One example: A big chunk of the Mississippi River Valley is a flood-prone area, it's also where we grow the bulk majority of our food.
Did you figure that out all by yourself? How commendable.
Has there ever been a time in the last 10 Million years when the Mississippi River Valley was not prone to floods?
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Originally Posted by Votre_Chef
All kinds of coastal areas that are vital to our economy are considered flood-prone.
Wow, you're on a roll.
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Originally Posted by Votre_Chef
The problem is that flood insurance is too big a risk for private insurance companies to want to take on (because when floods occur, the damage is usually widespread and the payouts are huge), so the government has little choice but to step in, have people pay to offset the costs that come from flooding, which we can reasonably expect to occur at some point.
Your logic is 100% faulty.
There is absolutely no reason for the government to step in, and the government butt out and minds its own freaking business, and let the Free Market work its magic.
So what would happen?
Commercial or residential property owners would be forced to purchase flood insurance or face ruin. If flood insurance is too expensive, then property owners have the option of selling the property to someone who can afford to purchase and maintain flood insurance, or simply play the odds and adsorb the losses if there is a flood, or they can simply abandon the property.
Without government involvement, lenders would not issue mortgages without flood insurance as a condition --- just as auto lenders will not loan without full coverage insurance as a condition. That will halt or slow development in flood-prone areas which would alleviate many problems, especially costs.
Residential properties can be smaller, meaning instead of building a 4,400 sq ft McMansion, build a 1,200 sq ft home, which will cost less to insure for flood damage.
Without government involvement, credit card issuers would be more sensitive to persons living in flood-prone areas, charging higher interest rates, especially for those who don't have insurance, and that will alleviate cost problems.
Engineers and architects could start designing buildings that are flood-resistant, flood-proof or otherwise able withstand floods better.
With respect to the Mississippi River Valley, you can start undoing the damage caused by the Army Corps of Engineers.
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Originally Posted by Votre_Chef
When a tornado knocks down a city in Oklahoma and FEMA rushes in to help them, who pays for that?
FEMA is charged with disaster management.
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Originally Posted by Votre_Chef
Do you see where I'm going with this?
Nowhere.
FEMA providing disaster relief or assistance is not the same thing as the government compensating property owners for losses which should be borne 100% by property owners.
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Originally Posted by Votre_Chef
If you depopulated all the flood prone areas, the contraction and GDP (and loss of tax contributions stemming from that GDP--The Port of New Orleans alone makes $40 million in revenue every year and the amount of commodities and goods coming in and going out is worth billions) would dwarf the amount of taxes we pay to help them when they get flooded. Your notion that somehow the flood insurance program is a net loss for the country is absolutely ludicrous. The flood prone areas are valuable, that's why people live there.
Again, your logic is 100% faulty.
Working in a flood-prone area is not the same thing as living in a flood-prone area.
You can have your Port of New Orleans and still use it....workers can live outside flood-prone areas and be transported to their jobs with private transportation or public mass transit or even private mass transit.
The port and any commercial entities using the port are certainly free to pass the cost of flood insurance onto labor, products or services.
And if they cannot compete, then they need to move to another port.
If that's a problem, then the State of Louisiana.....you do know what a State is, do you not? --- can step up to the plate, instead of the "federal" government.
I fully understand the issues surrounding flood and hurricane insurance. The more important issue is that no one is forced to live there. That those who choose to live there expecting the rest of society to pay the price to insure their risk is the problem. There is NO justifiable reason that money should be taken from me in the form of taxes and used to subsidize the lifestyle of someone who chooses to live on the coast in a hurricane prone area.
Federal flood insurance is just one more example of the government picking winners and losers. It is a business that the government needs to get out of.
LOL, your definition of Hurricane prone area is small.
Hurricanes That are category 3 or Higher can sustain hurricane force winds for hundreds of miles inland. Ivan was well into northern Alabama before it lost hurricane strength.
And If you are counting Tropical storms, by your definition no one should live East of the Mississippi
LOL, your definition of Hurricane prone area is small.
Hurricanes That are category 3 or Higher can sustain hurricane force winds for hundreds of miles inland. Ivan was well into northern Alabama before it lost hurricane strength.
And If you are counting Tropical storms, by your definition no one should live East of the Mississippi
Hurricanes can actually be much more dangerous when they get inland. If even the remnant of a hurricane gets to the mountains it causes bad landslides. When Ivan hit western North Carolina it caused crippling landslides in the Asheville area dispite not being at hurricane strength.
The problem with FEMA is they made areas that were not flood zones into flood zones to increase revenue. Many areas here in the Bay Area all the sudden became "flood zones" even though it has never flooded and city growth stopped 40 years ago.
Many people, including myself, had to pay a surveyor (around 400-500$) to come to our house to determine that we are actually not in a flood zone and file a LOMA, which is an amendment to the flood maps, to FEMA. A friend of mine lives on a small hill, probably 20-30 feet above the flat land, they were put into a "flood zone" they had to then pay the same surveyor to file the same report with FEMA.
Btw, the flood insurance that I was mandated to buy was over $2500 per year for an area that never floods, never has hurricanes or large rain storms. It was simply a money grab.
LOL, your definition of Hurricane prone area is small.
Hurricanes That are category 3 or Higher can sustain hurricane force winds for hundreds of miles inland. Ivan was well into northern Alabama before it lost hurricane strength.
And If you are counting Tropical storms, by your definition no one should live East of the Mississippi
We're talking about flood insurance, but thanks for playing.
The bill was initiated in the house by a Republican and picked up hundreds of co-sponsors, across the aisle along the way. It received super majority bipartisan support. Not that it would have changed the outcome in the house, 33 reps did not vote, which is curious.
It could have been more fiscally irresponsible. At least the bill, in its final state, is applicable to only primary residences. As I understand it, those with second homes in flood plains will continue to experience up to 25% annual increases in premiums, until the premium balances the risk.
Last edited by middle-aged mom; 03-14-2014 at 11:24 AM..
If you depopulated all the flood prone areas, the contraction and GDP (and loss of tax contributions stemming from that GDP--The Port of New Orleans alone makes $40 million in revenue every year and the amount of commodities and goods coming in and going out is worth billions) would dwarf the amount of taxes we pay to help them when they get flooded. Your notion that somehow the flood insurance program is a net loss for the country is absolutely ludicrous. The flood prone areas are valuable, that's why people live there.
Indeed they are. They were made substantially more valuable when the government made the decision to underwrite flood risk and not charge premiums commensurate with those risks.
We cannot undo the situation without a huge never ending hit to the economy. We can however, require premiums to be commensurate with risks. We were on the right track, before this bill.
We're talking about flood insurance, but thanks for playing.
Hurricanes are usually what causes flooding for the eastern part of the country and that can extend hundreds of miles inland.
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