How to keep flood bailouts at bay

Hartford Courant: The National Flood Insurance Program was established to help communities afford the cost of insuring against inevitable floods and flooding, but in many respects it has only made things worse. Sub-market insurance rates send false signals about the risks of living in flood-prone areas and encourage development in dangerous places. Flood disasters have bankrupted the program.

Meanwhile, taxpayers are subsidizing people to live in harm's way and damage the natural resources — wetlands and flood plains — that help protect us from flooding.

The Flood Insurance Reform and Modernization Act has passed both houses of Congress, but due to the overwhelming workload of the economic crisis, members have postponed reconciling the two versions of the bill until early next year... The Senate bill makes these critical changes:

When the flood insurance program was created, Congress established lower insurance rates to "grandfather" existing homes, built before building regulations were enacted. Today, commercial and vacation properties still take advantage of these grandfather rates in repeatedly flooded areas, meaning taxpayers carry the burden. The Senate bill would phase in market-based insurance rates for those properties.

…The Senate bill also would require the Federal Emergency Management Agency's maps to indicate areas that would flood as a result of a levee or dam failure, informing property owners of the need to purchase flood insurance.

…The Senate bill would mandate that flood maps, which guide planning and development decisions, show not only the traditional 100-year-flood zone, but also the 500-year-flood zone to help communities better prepare for floods…..