Scientists skewer National Flood Insurance Program, citing waste, massive debt

Tom Johnson in NJ Spotlight: Want to rail about wasting taxpayers’ money? The National Flood Insurance Program might be a place to start, according to a report released yesterday by the Union of Concerned Scientists. The flood insurance program, funded by taxpayers nationwide, is rife with problems, according to the organization.

Here's a short list of shortcomings the union identified: Artificially low insurance rates encourage risky development in coastal areas; Flood maps do not accurately reflect the risk of flooding, especially with global climate change projected to cause sea levels to rise; Repeated payments to the same high-risk properties in coastal areas -- almost $9 billion nationwide since 1978.

The report also highlights many of the tough issues being debated by New Jersey policymakers in the wake of Hurricane Sandy, including where and how should rebuilding occur at a Jersey Shore ravaged by the superstorm; should some structures in high-risk areas be rebuilt at all; is the state failing to plan for future storms?

New Jersey is a prime testing ground for most of those issues. The state ranks fifth in the nation for flood-insurance policies, with nearly a quarter of a million issued by the federal government. Owners of those policies paid out $234 million in premiums to obtain more than $56.8 billion in insurance coverage, according to the report.

…With repeated disasters occurring along coastal regions in the past, the cost to taxpayers is mounting. As of last fall, the national program provided 5.6 million flood-insurance policies across the country, covering approximately $1.25 trillion in potential damages to those properties.

The program is also bleeding money, incurring more than $20 billion in debt since a series of major storms dating back to Hurricane Katrina. By the time storm claims from Hurricane Sandy have settled, the total could approach $30 billion, according to the report....

Somewhere on the New Jersey coast after Hurricane Sandy, on October 30, 2012. US Air Force photo