Thursday, September 18, 2008

Let's not subsidize risk

MarketWatch: In USA TODAY's lead editorial today, the paper calls on Congress to oppose expanding the soon-to-expire National Flood Insurance Program (NFIP) to include wind damage that is already covered by private insurers.

"The point of public policy shouldn't be to make it cheap to live in attractive but dangerous areas, but to promote development where it's safer. The federal flood insurance program has done just the opposite. Not only does it encourage building on the coasts and near rivers, it encourages rebuilding by paying homeowners whose homes have been repeatedly flooded. In an extreme case, one Houston area homeowner received $807,000 from the federal program for 16 flooding events over about seven years to repair and rebuild, according to a report by the National Wildlife Federation. Such irresponsibility would be rewarded if the program were expanded." (USA TODAY, Editorial, September 17, 2008)

"Natural catastrophe policy requires a longer-term, more comprehensive approach than what is currently being proposed, particularly as we look for ways to protect the environment and keep people out of harm's way as we confront more intense storms and hurricanes, and as sea levels continue to rise," said David Conrad, Senior Water Resources Specialist at the National Wildlife Federation, a member organization of Americans for Smart Natural Catastrophe Policy….

The Spring Street approach to Smith's Bridge in Asheville, North Carolina From: "The Floods of July, 1916", published by Southern Railway Company, 1917, Wikimedia Commons

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