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Homeowners need to pay insurance rates commensurate with risks, this will only become more expensive overtime with climate change. Although they have made some adjustments to insurance rates over the last decade FEMA is bankrupt and taxpayers are footing the bill. If you want to live in a high reisk area don't expect taxpayers to bail you out.
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Senator Chuck Schumer is objecting to a plan that would raise costs for some of his constituents by bringing flood insurance rates in line with climate risks.
WASHINGTON — One of the federal government’s main efforts to push Americans to prepare for climate threats is in question after the Senate majority leader’s office objected to a plan to adjust flood insurance rates.
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.
Homeowners need to pay insurance rates commensurate with risks, this will only become more expensive overtime with climate change. Although they have made some adjustments to insurance rates over the last decade FEMA is bankrupt and taxpayers are footing the bill. If you want to live in a high reisk area don't expect taxpayers to bail you out.
From my experience, FEMA Flood Insurance rates are already priced according to risk. My flood insurance costs $6,400/year for the maximum $250,000 payout because my home happens to be in a VE Zone. My home has been here for 40 years and has never flooded, ever. Not even in hurricanes and other named storms.
VE Zone: a coastal high hazard area
In direct contrast, my full replacement value homeowner's policy costs only $1,900/year.
From my experience, FEMA Flood Insurance rates are already priced according to risk. My flood insurance costs $6,400/year for the maximum $250,000 payout because my home happens to be in a VE Zone. My home has been here for 40 years and has never flooded, ever. Not even in hurricanes and other named storms.
VE Zone: a coastal high hazard area
In direct contrast, my full replacement value homeowner's policy costs only $1,900/year.
That is your experience but in general properties are underinsured, that is why they are fighting increased insurance costs.
Homeowners need to pay insurance rates commensurate with risks, this will only become more expensive overtime with climate change. Although they have made some adjustments to insurance rates over the last decade FEMA is bankrupt and taxpayers are footing the bill. If you want to live in a high reisk area don't expect taxpayers to bail you out....
I live in one of those high risk areas (coastal Florida) and agree with you 100%. I personally feel that FEMA, meaning the federal government, should not be involved in insurance in any way, shape, or form. That's what private insurance is for.
I live in one of those high risk areas (coastal Florida) and agree with you 100%. I personally feel that FEMA, meaning the federal government, should not be involved in insurance in any way, shape, or form. That's what private insurance is for.
Time was, any house on the coast could not get insurance or a mortgage. IMO, that's the way it should be.
When my mom built a house on the beach, that was the the case and she was willing to take a chance. After all, there had been no problems for years.
A hurricane came close, the tide went out taking the house and the lot.
My county still permits building in the flood plain. And people keep buying the houses. They should be on their own.
We are on the perimeter of the watershed, never even had street flooding. Not in any flood area. Ours is 500+ a year.
A letter to Senator Schumer is in order. They tried to increase the premiums a few years ago and the beach house people went nuts, so it never happened.
I'm getting damned tired of the federal government rescuing people who make dumb decisions. That includes corporate American. If the government caused harm to property or people they should cover the remediation. Otherwise stay out of private decisions.
Homeowners need to pay insurance rates commensurate with risks, this will only become more expensive overtime with climate change. Although they have made some adjustments to insurance rates over the last decade FEMA is bankrupt and taxpayers are footing the bill. If you want to live in a high reisk area don't expect taxpayers to bail you out.
What keeps this from happening? Florida, it's an easy answer.
Florida is the state that is:
-Naturally at or below sea level
-Tourist state that depends on the development of low lying areas and waterfront to economically survive
-10's of thousands move here annually to live near water which is all prone to flooding
-Politicians in the state pander to homeowners on the coast because that is where the big donations come from.
-The most Red, well-heeled place in Florida is Ft. Lauderdale, which is already experiencing flooding and is considered Special Flood Hazard Area(SFHA). But the Political Donations, Spectacular
-The most hardcore Blue area in Florida is West Palm and Miami Beach area, again both are Special Flood Hazard Area(SFHA). But the Political Donations, Spectacular
-Most residents of Florida could not afford to live in Florida if flood insurance rates reflected risk
The state of Florida and its Federal politicians irregardless of the party will ensure rates remain low for flood insurance.
1) There is some disagreement as to weather warmer oceans will actually increase those risks. In general you would think it would, but it's a complex system so maybe it tends to bounce hurricanes up into the atlantic more?
2) Global warming is a great selling point for rate increases but the FEMA program has typically been a long term loser (underpriced on average).
The "overhaul" better not raise my premium above $6,400/year. That's already way too high on a property in an area that has never flooded, as it is.
6400 premium, 250,000 coverage.
Assuming a 20% expense load that means .8 x 6400 = 5k is for losses (roughly).
250k/5k means once in 50 years you get walloped for the numbers to work.
Might not happen for 100 years and then you get two years in a row.
This is the problem with some flood insurance....because of the "I lived her my whole life and nothing happened" isn't long enough unless they're a big oak tree lol.
Lastly, go see if you can find private flood insurance, it is out there in some places.
Let this sink in though, insurance companies like any other company WANTS business. If the fed govt. is doing a poor job setting rates (and they do at times) then in a number of situations the private sector will swoop in and cherry pick.
So, if you can't get a private insurer to undercut the feds then it probably tells you that you're not being that overcharged. One problem is that any sort of adhoc underwriting is expensive and that eats up the policy premiums. It's one thing if you owned a factory and could get someone to come look at something where the premium is 500k and not have a few thousand in expenses sink the cost proposition.
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