Milton threatens to trigger flood insurance reckoning for Congress

[BumRushDaShow]

Source: Politico

10/09/2024 09:43 AM EDT


Hurricane Milton, a monstrous storm set to hit western Florida Wednesday night, is poised to deplete the finances of the government’s chronically indebted flood insurance program. Congress is already bracing for a fight over what to do about it.

Key lawmakers and aides are beginning to game out the likely impact on the National Flood Insurance Program, which is the primary option for millions of American homeowners to protect their finances from catastrophic flooding.

The emerging view from several lawmakers and staffers is that NFIP claims spurred by Milton and last month’s Hurricane Helene will likely exhaust the program’s nearly $5 billion in funds and force it to tap $9.9 billion in Treasury borrowing authority. While the NFIP collects premiums and pays out claims similar to a typical insurer, it’s been upside down financially because of weaknesses in how it assessed flood risks for decades and giant losses brought by devastating storms including Hurricane Katrina.

Some on Capitol Hill expect Milton could push the NFIP to the edge of what it can borrow from Treasury, potentially forcing Congress to raise its borrowing cap or to pursue some kind of alternative funding to ensure that claims are paid.

Read more: https://www.politico.com/news/2024/10/09/hurricane-milton-congress-flood-insurance-00183017

[IronLionZion]

1. Flood insurance is a money loser

since the people who get it are the ones who live in places that get frequent flooding each year. So you can't get a diverse risk pool. Good luck getting any kind of consensus on what to do about it. Nobody wants to pay for it. Maybe tie it to wildfires out west and tornadoes and other natural disasters to make it a general natural disaster insurance.

[Marthe48]

8. Companies like nationwide increased their wind deductible

They are no longer my home insurer, because they suck. When they increased our deductible, they said it was because of high payouts in areas prone to wind damage, like Florida, the plains and other places well away from here.

Another point, we are in the Muskingum Watershed, out of the flood zones of the rivers and streams in the area, but there is a tax imposed on all property owners to fund the watershed. I used to know why they wanted the money, but I'd have to look it up.

When the Missouri River flooded, probably 2011, there was renewed scrutiny of flood plains and flood insurance. About that time FEMA raised the cost of premiums from $200 to $2000 annually. We were looking at a house we liked in Marietta, Ohio. It had not ever flooded that we could find, but it was considered to be in the flood zone, so we didn't get it. While we were looking at flood information about Marietta, we learned that about 11 building in downtown Marietta consistently made claims for flood damage. Going back to the Missouri River, Army Corps of Engineers said that their effort to control the Missouri over the years had failed and they considered it a waste of time, money and effort to try any longer to protect buildings on the flood zone on that river.

When we bought the house we lived in, we moved from a higher elevation, had no idea to even think about flood plains and flood insurance. I'm glad we bought this place.

There isn't going to be a good solution, because when the U.S. was getting settled and developed, who thought about floods and wind when they pick a place to build or live? Now, we do, but it seems like it is almost too late, and people who are living on flood plains or Tornado Alley are going to keep suffering through property damage.

[slightlv]

9. My house insurance jumped enormously this past payment...

like nearly 1-1/2 times as much. My insurer (State Farm) also said it was due to consistent catastrophes in like Florida and wildfires in California. They also said the timber costs from Canada are still high, as are lumber costs across the board... therefore, they factor in the what will it take to rebuild in worst case scenario. Although I live in tornado alley, that whole track has begun to shift east of us for the last few years, and I don't live close enough to the Missouri River to have impact me. I do have one small creek across the street, but it has never flooded. I do like the insurance agency I'm dealing with now... they aren't afraid of telling me anything, regardless of how it looks for the industry; and it's an all-female office. They've even found ways to help when the payment was more than I had in the bank.

We all pay for climate change, there's no escape the increase in costs because there's no longer any escape from climate change. We're just all going to have to deal with the increased costs because people for decades said it was a "hoax" or kicked the can down the road over and over again. Eventually, we're going to have to come to terms with climate migration, too... not just from outside this country, but also our own people looking to move to "safer" places. We aren't ready for any of this, as too many people STILL see it as a hoax! grrrr...

[bucolic_frolic]

2. All the insured get a new home in the flood plain

Rinse and repeat.

[Tadpole Raisin]

3. The additional number of insurance companies exiting Florida

after this year will probably create a real panic among homeowners and the exodus has been going on for years. USAA stopped insuring homes there ~ 15+ years ago.

Will people take the money and run? Will more uber wealthy build on what’s left?

If you want to know if there is global warming just check what the insurance companies are doing. They don’t care about political bs, it’s all hard cold numbers.

[Tarzanrock]

4. The ball is now in your Court, Republican Nazi Party ...

It's going to be really interesting to see how the penny pinching Republican Nazi Party deals with "insurance" now that Deep Red Republican State Florida is soon to be devastated by these two (2) hurricanes (with more foreseeably on the way). These fucking Republican assholes refuse to fund FEMA so we will see how they deal with what is going to be the financial collapse of the insurance industry for homeowners in Florida and other coastal areas as the insurance industry refuses to insure casualty losses because of the climate change "hoax" as the Turd likes to call it. There's a whole lot of mobile homes in central and southern Florida which are going to be blown to Hell and gone by Milton and millions of Floridians who are going to have significant property losses -- and a whole lot of those property owners are "conservative" hard-core Republican voters. Sniff, sniff -- where's my box of Kleenex? If only the Turd was President -- he could "divert" the hurricane with his Sharpie pen!

[The Mouth]

7. You underestimate the ability of MAGATs

to function with extreme cognitive dissonance running full tilt in their brains.

These are the people who do *NOT* want 'socialized medicine' but do NOT fuck with their Medicare. The hate 'gubmint' but will skin you alive for doing anything to social security. They view a serial adulterer and despicable liar as the anointed of God...

Blaming 'Demoncraps' for lack of needed infrastructure and the 'social engineering' to be responsive to hurricanes like Milton while voting for the Republicans who cut the funds is falling off a ladder easy for 'em.

[IbogaProject]

11. The political breakdown for moble homes isn't too different than the whole voting block

It is easy to assume most people in these "red" areas are GOP but an area can be red with just 55% GOP votes. But it is clear to begin a phaseout of fossil fuel subsidies. And I assume we need to nudge up the tax rates on our top income tax brackets to better fund a national response to these disasters. And a federal tax on all properties inside a 500 year flood line, time to let the market adjust properly.

[50 Shades Of Blue]

5. Congressional Repugs: SHRUG.

[SpankMe]

6. Probably the death of flood insurance as we know it

These last two hurricanes have probably blown-up the actuarial tables so badly that the math will never work out again.

[moreland01]

10. I'm guessing mortgage companies will have something to say about that.

If your home is destroyed, there's not much for them to foreclose on but the (now worthless?) land. Maybe I'm confused, but I'm trying to game out what happens when nobody can get anything but catastrophic insurance that goes belly up instead of paying after huge hurricane(s) come through. How do you get a mortgage? Don't mortgages require homeowners insurance?

[sarisataka]

12. It seems a lot of people do not understand NFIP

it is administered by the private insurance companies but underwritten by the federal government. It is FEMA money that is being paid out, not from the coffers of the insurance companies. (The companies receive per policy fees for their administrative work, the premiums are sent to the government)

Also flood insurance is handled differently than home insurance. A policy holder selects their building coverage up to a maximum of $250,000 and pays accordingly to what they selected, modified by the mapped flood zone they live in. Coverage is available for personal item (up to $100k IIRC) but is at an additional cost.

Part of the problem is many flood maps had not been updated in decades, even when the old flood zone definitions were superseded by new designations. This has left many homes either paying too little or far too much for their actual risk. The process of updating the maps is compounded by climate change altering the zones nearly as fast as they are recategorized.