La., Miss. losses could jack Fla. flood insurance

[Aquawind]

Yep.. Payback for recent years is gonna suck. Throw in a couple wars and I hate to think of what we have done to the next generation financially..

http://www.news-press.com/apps/pbcs.dll ... 02021/1075

We may pay for Katrina damage
La., Miss. losses could jack Fla. flood insurance

Originally posted on July 03, 2006


By Melanie Payne, mpayne@news-press.com & Jeff Cull, jcull@news-press.com

Hurricane Katrina’s effect on the nation’s flood insurance program won’t be felt in Mississippi and Louisiana, where the storm did the most damage.

The impact will be in Florida, where the lion’s share of the National Flood Insurance Program’s policies are in force.

More than 2 million home and business owners in the Sunshine State could pay higher flood insurance premiums and have subsidies for older homes, businesses and vacation properties eliminated if Congress enacts many of the proposals being floated to fix the financially shaky flood program.

Hurricane Katrina essentially bankrupt the flood insurance program with $22 billion in claims. The program only has $2 billion in premiums each year to pay claims.

Taxpayers likely will pick up the difference.

The National Flood Insurance Program, a part of the Federal Emergency Management Agency under the Department of Homeland Security — which in most years is self-sustaining — will borrow up to $25 billion from the U.S. Treasury to cover losses from the 2005 floods.

Congress is making strides toward a financially stronger program, said David Conrad of the National Wildlife Federation. The agency has an interest in the flood-insurance issue because of its concerns over development.

To really fix the program, they will have to do something to stop development in flood-prone areas and to terminate insurance to properties that flood over and over, he said.

So far, bills Congress is discussing would raise rates for some policyholders who receive subsidies, including properties with multiple flood claims. The bills don’t address the issue of coastal development.

This is a big and politically difficult oversight, Conrad said. Local governments want the coastal high-hazard developments because of the tax dollars they generate, Conrad said.

“As long as you keep insuring every building located in harm’s way is it a big surprise that the program is getting deeper and deeper in debt and costing more and more?” he asked.

Although the House has passed its bill, HR 4973, the Senate bill is a long way from a vote and a lot can change, said Bryan Gulley, a spokesman for U.S. Sen. Bill Nelson, D-Orlando.

Gulley said Nelson is pushing for a national commission to find ways to pay for disasters. Those could include tax-free savings accounts for individuals and could allow insurance companies to accumulate catastrophic reserves for future storms.

The Senate version of reforms to the Flood Insurance Program includes forgiving the debt to the Treasury. Annual interest on $25 billion, without making any dent in the premium, is more than $716 million, and the program collects $2 billion in premiums every year.

Last year’s claims were an aberration, said Eugene Kinerney, spokesman for the flood insurance program. In 2006, the program paid about as much as for all the claims in its 37-year history. And still, the program continues to honor contracts to its policyholders, he said.

The flood insurance program was started in 1968 to provide affordable insurance for flood hazards that private insurance companies wouldn’t cover at reasonable rates.

A second goal was to get local communities to develop in areas not in danger of flooding.

The devastation of Katrina caused Congress to give a higher priority to these and other problems in the flood insurance program, said Larry Larson, executive director of the Association of State Floodplain Managers.

The changes being proposed are a good first step, he said, and are getting lawmakers to look at things such as the fairness of subsidizing second homes in high-hazard areas.

Coastal development that has been a boon to state and local economies also made Florida the National Flood Insurance Program’s biggest customer.

Of almost 5 million policies, more than 40 percent are in the Sunshine State, with premiums of more than $754 million.

But the federal government can’t control growth and, therefore, the liability of the program in Florida without controlling coastal development.

Instead, federal officials have told local governments to follow certain rules on how to build to lessen the risk of property damage by elevating buildings, said Bill Spikowski, owner of a planning firm in Fort Myers.

Spikowski said people would have built in risky areas regardless of whether flood insurance was available.

More expensive — or nonexistent — flood insurance might have dampened the enthusiasm Andrew Markowitz had when he and his wife, Susan, bought their vacation home on Sanibel three years ago.

A deal breaker? He’s not sure.

“It’s hard to say,” Andrew Markowitz said. “We fell in love with the island.”

[Ixolib]

Hurricane Katrina’s effect on the nation’s flood insurance program won’t be felt in Mississippi and Louisiana, where the storm did the most damage.

I believe it "will" be felt.....

[Audrey2Katrina]

Hurricane Katrina’s effect on the nation’s flood insurance program won’t be felt in Mississippi and Louisiana, where the storm did the most damage.

I believe it "will" be felt.....

I can assure you it already is!

A2K

[Mississippi Storm Magnet]

Yep.. Payback for recent years is gonna suck. Throw in a couple wars and I hate to think of what we have done to the next generation financially..

http://www.news-press.com/apps/pbcs.dll ... 02021/1075

We may pay for Katrina damage

Sorry if I'm not sympathetic to ya'lls unfortunate plight. Most people that live in this area would read this article and get a little miffed like me. I pay flood insurance, and believe me, my premiums are increasing too, so like Iloxib, we are feeling it.