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Please begin with an informative title:

Austerity Mongers and Misery Merchants have a new target in their sights - affordable Federal Flood Insurance.  

Yes folks, one more aspect of the government deploying money and resources in a manner that actually trickles down to and benefits the general population is under attack - The Federal Flood Insurance Progam is looking at passing on "huge" increases to enrollees. This will have far reaching consequences.


You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

For some background:

Analysis of How Flood Insurance Reform Act of 2012 May Affect State and Local Adaption Efforts

In this whitepaper we find out most of the key provisions of the bill including-

• Phase out subsidies for severe repetitive loss properties, second homes, business properties, homes substantially damaged or improved (i.e., greater than a percentage of the market value of the home), and homes sold to new owners.

• Allow insurance premium rates increases of 20 percent annually (previously capped at 10 percent), allow for deductibles, and require that premiums be calculated based upon “average historical loss year,” including catastrophic loss years.
I don't think anyone has a problem with "severe repetitive loss" properties losing their subsidies or those properties where is makes no economic sense to restore them - a prior to flooding wreck of a home with a 50K value that would cost 100K to replace, but to put all homes for sale whether principle residence or second home into an unsubsidized private for profit flood insurance market is an absolute sure-fire recipe for making millions and millions of properties essentially worthless when they cannot be sold or transferred. This would apply to both residential and commercial properties.

Secondly, flooding is not confined to coastal areas contrary to popular belief. Inland flooding from rivers and streams and rain events I believe account for the majority of claims historically - so this issue is not confined as some may think to privilleged  or clueless residents of coastal communities who choose to put themselves at risk as many are always quick to claim pointlessly.  

Changes to flood insurance program ends federal subsidies

In this story read ahow a business owner cannot sell his property when his flood insurance rates rise from $4000 to $27000 ANNUALLY

Sometimes I actually wonder if there is some kind of movement afoot by TPTB to destroy the lives and savings and economic standing of average Americans who have the vast bulk of their personal wealth in their real estate assets. First we had the financial evildoers blowing up the real estate, mortgage and bond sectors (with accompanying damage to pensions) with their  3 card monty shell games while simultaneously dismantling the deed and title system of the US. Now, for any private landholders till standing who may be the future victims of a natural disaster, we are setting up a gigantic catch 22 that will ensnare all owners and would be owners of a large percentage of our housing stock which will drive those home values into a giant metaphorical sink hole from which there will be no recovery.

FEMA is redrawing their flood maps as we speak. Many people who think they do not live in a flood zone will find out to their surprise that with the new maps that they are. Many if not most mortgages require people in high risk flood zones to have mandatory flood insurance. Even if you yourself happened to be grandfathered out of this requirement, it will come to haunt you when it comes time to sell your house. You pay $400 for flood insurance you tell the new owners and all is well until shortly before closing when they find out that their insurance is not your $400, but THOUSANDS of dollars a year. Goodbye buyer, goodbye sale, goodbye property values.

There is one category of homeowner who will not care or be affected by the changes to the National Flood Insurance Program - the wealthy. What a surprise. The wealthy will still be able to pay cash for their houses and if they lose a couple from their inventory due to flooding, oh well, there's still the Aspen condo.

Why do we have this wrong-headed legisaltion in the first place? It stems from the mindset of privatizers and reformers who do not understand that there are some functions of government designed to promote and benefit the public welfare that do not "pay for themselves". Police are a cost. Fire departments are a cost. A national postal service is a cost. Money out of pocket for the common good is a cost.

Why did we establish Federally subsidized flood insurance in the first place? BECAUSE PRIVATE UNSUBSIDIZED FLOOD INSURANCE WAS UNAFFORDABLE!!!!! (Sorry for screaming, but this is hair rippingly out obvious)

Ask yourself how is it that with one hand the federal government is creating new subsidies for privatized for profit insurance (Healthcare reform) and taking it away with the other hand when it comes to flood insurance? How is it good in one instance and bad in another when in both cases it exists for the sole purpose of making the unobtainable obtainable?

Why do we have a government that will subsidize certain fabulously wealthy industries with tax breaks, but balks at making flood insurance affordable? Plus, why are they doing this at precisely the time and the moment when more and more people are aware of the necessity of flood insurance?

There are some good things in the bill. Yes, new building standards are necessary. As I said earlier I agree that compensating the same owners in the same areas multiples of times makes no sense. Couldn't that situation be handled by simply pacing a lifetime cap for claims on a particular property and have the cap carry through on sale? In that case, a homeowner who never made a claim would be able to pass on a claim free property, but if claims had been made, it would be a required disclosure and only the remainder of the cap would be left to a new purchaser. Doesn't that make a lot more sense?

Everyone everywhere needs to tell their congressperson and their Governor and their Senator that the Biggert-Waters Flood Insurance Reform Act is in need of massive reform and overhauling itself. The potential of this bill to destroy the value of property and businesses is in my estimation potentially larger than that of any actual natural disaster.

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