- - Wednesday, September 19, 2018


Hurricane Florence hurled furious wind and drenching rain on the Carolinas, but it was the water that fell on saturated ground that caused epic destruction. As the overflowing rivers, streams and estuaries recede homeowners are deluging insurance agents with pleas for a check large enough to cover clean-up and repairs.

As a result of an unwieldy federal flood insurance program, U.S. taxpayers could be on the hook for billions for the restoration. As Congress hammers out flood insurance upgrades, lawmakers must impose incentives to rebuild lives and houses on higher ground. Everyone will pay if they don’t.

Striking the Atlantic coastline as a Category 2 storm, Florence dumped record rain, more than 30 inches in some places, inundating communities in North and South Carolina before veering northward through the mid-Atlantic states before blowing out to sea. The death toll has climbed to three dozen, and tens of thousands of houses, shops and stores, schools and churches suffered flood damage. The final toll won’t be known until flood waters subside, but estimates range from $3 billion to $20 billion.

Florence’s path of destruction reflects on Congress’ glaring failure to adopt legislative upgrades to the National Flood Insurance Program (NFIB). The flood fund underwrites insurance policies in flood-prone regions, guaranteed by the full faith and credit of the federal government, which is itself $21 trillion underwater. That’s a lot of money, even as Washington measures money. As a result of inaction, the program, administered by the Federal Emergency Management Agency (FEMA), has undercharged policyholders and gone broke paying out claims.

Last year, the flood program was $25 billion in the red after paying policyholders for property damages caused by Hurricanes Maria, Irma and Harvey. As a stopgap measure, Congress forgave $16 billion of debt. And in August, Congress granted a three-month extension just as the program was about to expire.

The House has now passed the 21st Century Flood Reform Act, a five-year reauthorization of the flood fund that includes several measures putting federal flood insurance on a stable footing. These include requiring FEMA to conduct an annual independent study of the programs to determine whether premiums are sufficient to pay for long-term expenses. Relying on government bailouts is no way to run a business that insures 5 million properties.

The legislation would enable communities to develop their own flood maps that accurately depict regions vulnerable to rising waters. Towns frequently resist inclusion on flood maps because it makes the purchase of flood insurance mandatory and thus discourages development. But when storms like Florence take property owners by surprise, damage to uninsured buildings can mean financial devastation and greater setbacks to long-term economic growth.

The legislation would improve methods of identifying properties prone to repeated flooding, which hit insurance reserves hard with multiple claims. Additionally, the measure would allow private insurers to offer their own flood policies, provided they meet government-approved minimum coverage. Enabling insurance companies to compete for business could result in lower premiums, says the House Financial Services Committee.

The Senate is stalled over its own flood insurance bill, and Hurricane Florence was a jarring reminder that time is a-wasting. Natural disasters are unpredictable, hence they’re frequently called “an act of God.” As the nation’s population, now at 325 million, continues to grow, smart insurance policy is a proper way to achieve a clear balance between cost and risk.

While Eastern states, and Atlantic Coast states in particular, are frequently vulnerable to storm-season flooding, the Western states face other ravages of nature. Summertime wildfires blacken thousands of square miles of dry wilderness, burning houses and killing many caught in the fire. Flood insurance, both federal and private, must not be an incentive to build where flooding is likely.

Victims of natural disaster deserve sympathy and assistance. Still, Americans who settle where they can gaze at scenic coastlines and rugged mountains can’t expect others to pay for it. Federal disaster programs must not encourage risk-takers to gamble with their lives and property, but rather nudge them toward safer places to live.

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