As hurricane Earl roared along the Atlantic coastline and other storms swirled behind it, millions of Americans looked to Washington to subsidize any repairs from water damage. A new liberalized National Flood Insurance Program is in the works. It is sponsored by the controversial Maxine Waters (D-Calif) who, on Sept. 3, told constituents she would urge the Senate to approve her House-passed bill to extend the program another five years.
The program already is drowning in close to $19 billion of debt. Another reckless federal step toward national bankruptcy is on its way.
Waters’ legislation raises the maximum damage coverage limits, provides notice to renters about necessary insurance coverage, and creates a “Flood Insurance Advocate” at the Internal Revenue Service. The National Flood Insurance Program (NFIP) has had temporary extensions and lapses since it started in 1968. The Waters legislation, in addition, would delay the implementation of flood area maps currently being updated by the Federal Emergency Management Agency (FEMA). Such a delay “would keep homeowners in affected areas from being burdened by insurance costs. Mandatory purchase of flood insurance would be delayed for five years,” she told constituents of her south Los Angeles District. So, mortgage companies wouldn’t be allowed to require homeowners to buy flood insurance during these years. But subsidized protection for other millions in flood-risky areas would continue to 2015 if her bill becomes law.
Waters chairs the Housing and Community Opportunity Subcommittee, which has jurisdiction over NFIP and FEMA. She currently faces ethics charges for her efforts to help a bank with ties to her husband. She is the third-ranking member of the House Financial Services Committee.
FEMA’s National Flood Insurance Program is the country’s main flood insurer. It was started because private insurance companies stopped covering expensive, repeated flood damage to homes and businesses. In repeatedly flooded properties, owners have collected billions of dollars from this federal subsidy plan regulated by Congress. The NFIP now helps to support entire industries: banks that sell mortgages to homes with flood insurance, construction workers who repair and build the homes, insurers who write the policies for homeowners on behalf of the government and real estate agents who sell the usually pricy waterfront properties.
In Wilkinson County, Miss., a home has been flooded 34 times since 1978, USA Today reported. Extraordinary as the repeated damage must be, even more extraordinary is that an insurer has paid claims every time, required no proof of flooding, never raised premiums after a claim and vowed to continue insuring the house forever. The insurer, of course, was the federal government’s NFIP. The value of that Mississippi home was reported to be $69,900, and total insurance payments have been nearly 10 times that–$663,000.
The number of “repeated-loss” homes has doubled in the past 15 years. One in ten repetitive-loss homes have claims that exceed the value of the homes. Not long ago, the NFIP paid $400,000 to raise a house in Pennsylvania by 10 feet. In recent years, more than $800,000 in flood claims reportedly have been filed for that same home. The Houston Chronicle reported Aug. 13, “The devastation wrought by hurricanes Katrina and Rita in 2005 has left the program deeply in debt with little or no hope of stemming the tide of red ink,” the Chronicle story said. Before NFIP, people who lived in coastal or other areas of high risk of flooding had to pay for repairs out of their own pockets or sometimes from disaster aid. The NFIP was supposed to use the premiums it takes in—even though they are low—to pay off damage claims.
"The insurer, of course, was the federal government’s NFIP. "
Typical of the Dems. Never been a program that no matter how dismally ineffective and costly, they will continue to run it.
It has to be a pathology. It just has to.
34 repeated payouts for flood damage to the same property is insane–and maddening, when taxpayers are left with the bill. After 2 or three incidents, coverage should simply be denied, a house moved, or the property's "plot" removed from the town's list of buildable house lots.
However, there IS another side to the story. Insurance companies and banks make a LOT of money off flood insurance, and have ways of blackmailing homeowners into buying highly "gimmicked" and inflated versions of it.
Our mortgage holder has just increased the amount of insurance we are required (by them) to have, from 300k to 1/2 a million dollars. Conveniently {for them], they recommend buying the added insurance thru THEIR insurance company. (Gee, I wonder why.) Nothing about our house has changed. Yes, we do get a couple of inches of water in our basement when an unusually high tide comes along every 3 or 4 years. We deal with it. There is no claim, the sump pumps turn on, and we mop up the rest. We move our cars to higher ground if there's a bad one coming. In the blizzard/hurricane of 1978, we had a couple of feet of water in the basement, but we still have the same boilers. Our house is basically original from 1900, so it survived the 1938 hurricane, which moved islands around in Narrangansett bay, and rained salt water from the ocean in Burlington, Vt. Our house is protected by acres of salt marsh between us and the harbor. The harbor provides protection of the salt marsh. We are in the "no wave velocity" flood zone. We have have no expensive "belongings" to replace; our tv is 30 years old, there is no jewelry, silver, china, etc….just some old books. I could have our entire house replaced for about 280k, from the foundantion (poured concrete) on up. We have no need of half a million of insurance, but all of the sudden, it is a "necessity". Could it have to do with Bank of America's new search for revernue sources?
We are seriously considering saying "screw you" to the bank, and paying off the mortgage in full, [we only have three years left]. and then buying the appropriate amount of insurance on our own, NOT buying it "at gunpoint".
What Maxine Waters doesn't get, is that SOME of us try to be responsible ON OUR OWN, we do not look to "insurance" companies to ensure our welfare [Lord help us
if we did !]. If she wanted to make improvements to the flood insurance system, she could put in some incentives for responsible home ownership [flood zone or not], and some disincentives for repeatedly irresponsible homeowners. But that won't happen….
This woman is one of the reasons the country and California is so far in debt. Maxine, you are insane. It would be nice to educate the voters in her district to vote her OUT!!!
John, the problem is that the voters of CA are a bunch of leeches themselves and all the education in the world wouldn't change their votes. They demand the services that Waters provides since it forces someone else to pay for thier folly. Why else would she, Boxer, Brown, etc remain in office, and why else would CA be demanding that the other 49 states (or 56 according to Obamas count) bail them out?
Amen!! To many people with their hand out, or, should I say in our pocket
Waters is vastly too stupid to realize that setting up a program that gives away other people's money, with no upper limit, will rapidly expand out of control.
She has to be one of the most hyper-racist, jaw-droppingly stupid embarassments in the U.S. How does she even manage to dress herself in the morning? Perhaps she has a teenager drive her to her office, and unlock the office door for her, because she has never quite been able to figure those complicated things out.
She still does not know exactly what a microphone is used for – perhaps it is a pointer to show you where your head should be so people can see you? I seriously doubt she has the brains or education to be able to read and write.
The only reason she keeps getting re-elected, is that historically American blacks vote exclusively based on skin color, and on absolutely no other factor of any kind what-so-ever.
its all about the BS And she Is Total BS.