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Own a house in a flood zone? National flood insurance rates set to skyrocket.

By mycal   2013 Jan 14, 1:08am   1,680 views   9 comments   watch (1)   quote      

"Remember that debate on whether to extend Stafford student loan programs? That measure was attached to a transportation bill after a bipartisan compromise. But also attached to that bill - which was eventually signed into law by President Barack Obama - was the decision to end subsidies to the National Flood Insurance Program.

That means for residents who do not raise their homes to the elevation required under the base flood elevation standard for their lot, annual flood insurance rates may skyrocket to levels exceeding $20,000 even for the most modest of homes.

"I asked FEMA about this, and their answer was, 'there are going to be some very difficult decisions to make,'" said Mayor Acropolis."
I'm in the SF Bay area but this article is from my NJ shore hometown. It highlights the difficulties that waterfront homeowners face, regardless of the hurricane Sandy damage suffered. Without the federal subsidy flood insurance rates will jump from an example of $1,600/year to $4,000-5,000/year. It will be even worse for people who can't afford to raise their houses. It could cost up to $60,000 or $70,000 to raise a ranch on a slab foundation. In addition to the already high NJ property taxes, this will cause a lot of people who have lived their entire lives on the water to lose their homes. The worst part is I know that people with the money to do it properly will rush in. The properties will not revert to open space.


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1   HEY YOU   638/638 = 100% civil   2013 Jan 16, 10:18am  ↑ like (1)   ↓ dislike   quote    

If I can't afford flood insurance, I could move to a fault line or to the base or a volcano. Which of the 3 makes me the dumbest?

2   gbenson     2013 Jan 16, 1:57pm  ↑ like (2)   ↓ dislike   quote    

Seriously, build a house on the beach you better expect to get wet every once in awhile.

3   fedwatcher     2013 Jan 17, 1:47pm  ↑ like (1)   ↓ dislike   quote    

Flood insurance affects many in Northern California.

In East Contra Costa County there are levies.

In Pittsburg and Antioch there are dangers.

Then there all the creeks that can become rivers.

All mortgates require that you have a flood insurance policy if you are in a flood zone, and those zones change every year.

4   zzyzzx   571/571 = 100% civil   2013 Jan 17, 10:54pm  ↑ like   ↓ dislike   quote    

fedwatcher says

All mortgates require that you have a flood insurance policy if you are in a flood zone, and those zones change every year.

Another reason not to have a mortgage.

5   Tenpoundbass   992/993 = 99% civil   2013 Jan 18, 2:22am  ↑ like   ↓ dislike (1)   quote    

There's not a patch of dry land on Earth that is not in danger of being flooded someday. Even mountain tops are susceptible to flash flooding.

6   curious2   594/594 = 100% civil   2013 Jan 18, 2:32am  ↑ like (3)   ↓ dislike   quote    

Much of the Sacramento area used to flood naturally, and made excellent farmland. Then developers decided to build housing on concrete pads, with living area below flood level. They say it looks nicer, and they can sell it for more $ to people who don't want to climb stairs. One problem is, the old state program to compensate flood victims was budgeted mainly for farmers' crops, but now it's supposed to compensate vast housing tracts full of flat-screen TVs. Another problem is, a flood would create a huge disaster and disruption. So we spend a fortune building and reinforcing levees, and insuring against risks that shouldn't have been created or increased this way. It's been a huge subsidy for developers of really short-sighted construction, enabling superficial buyers to live in suburban sprawl with too little exercise. Building above flood level, whether apartment buildings or even two-story houses with the living area upstairs, would reduce the risk dramatically.

7   Tenpoundbass   992/993 = 99% civil   2013 Jan 18, 3:05am  ↑ like (1)   ↓ dislike (1)   quote    

I say we do away with insurance all together and we just make everything "at your own risk". Everyone would be far better off. They could put those premiums in an *interest baring account, and have their own funds available for emergency when you need it. You know like it's been for ever, before we screwed it up.

8   gbenson     2013 Jan 18, 5:49am  ↑ like (1)   ↓ dislike   quote    

CaptainShuddup says

just make everything "at your own risk"

Thank you for the cartoonish nonsensical tea party version, which is usually followed by getting all upset that someone might take your medicare away.

Now for the ultra left wing liberal version.

Insurance is by definition something that protects you against unforseen events like a car crash, cancer, etc, so we need to have it around. That being said, we do need to curb insuring things like building a house on land that floods every 10-15 years, and make the homeowner pay a premium that corresponds to the actual risk. They need to have skin in the game.

If you elect not to pay for insurance, and your home washes away, then its 100% your loss. Same for health care, everyone should have the option of purchasing into a private or public insurance plan. BUT if you elect to save your pennies and don't purchase in, and you get sick, you are responsible for 100% of the cost up front or else the hospital can refuse treatment. Alternatively, the hospital will treat you but if you can't pay 100% of the cost, its off to debtors prison for you where you work off the debt.

Lastly, if there is an 'uninsurable (read unforseeable) event' like an asteroid slams into a US city, the federal and state govt's should offer disaster relief and help rebuild those areas provided that it's not likely that another asteroid is headed for that same city anytime soon.

9   unstoppable     2013 Jan 18, 6:21am  ↑ like   ↓ dislike   quote    

I'm very curious what the end result of this policy change is.
I see two possabillitys:
1. rich people will gobble up the land continue to build expensive homes and just accept the cost of insurance or rebuilding every 15 years.
2. Average people build more modest homes that are cheaper to insure and rebuild.

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