Flood insurance premiums should be based on risk

An editorial from The Intelligencer/Wheeling News-Register

WHEELING, W.Va. — Of course federal flood insurance premiums should reflect risk. But thousands of Ohio Valley residents are being told of drastic premium increases that don’t seem to be based objectively on potential damage from high water.

By a better than two-to-one margin, members of the U.S. Senate voted last month to suspend big increases in flood insurance premiums for a few years. The delay is intended to give National Flood Insurance Program analysts time to devise a realistic premium structure.

But some members of the House of Representatives, including Speaker John Boehner, R-Ohio, have balked at following the Senate’s lead. They are backed by some conservatives who point out the flood insurance program has a debt of $24 billion. That, they note, is because the NFIP did not set premium rates properly for much of its history.

Beyond any doubt, that is true. But nearly all of the NFIP’s deficit is due to massive claims from coastal areas devastated by Hurricane Katrina and Superstorm Sandy.

Several weeks ago, area residents began receiving notices their flood insurance premiums would be skyrocketing. As we have pointed out, at least some of the new charges bear no resemblance to reality. One man with property valued at $60,000 was informed his premiums would be $8,000 a year.

That is absurd…

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