A popular definition of insanity is doing the same thing over and over again and expecting different results. One prominent example is rebuilding properties in a flood plain without taking steps to prevent or mitigate future loss.
FEMA is currently almost $21 billion in debt, largely due to flooding in coastal and mid-western states. They have identified about 160,000 properties as "Repetitive Loss Properties", defined as insured structures that have been paid two or more more federal claims of over $1,000 within 10 years. Five states - Louisiana, Texas, New York, New Jersey and Florida - have most of the RLPs. One third of all flood insurance claims are concentrated in 12 counties.
Both houses of Congress are now considering legislation that would require flood prone communities to develop and implement mitigation strategies. Failure to create or implement plans would result in sanctions including reductions in financial assistance.
Flood losses can be expected to rise as climate change causes more severe weather events. It is common sense to either mitigate the risk by making properties and communities more flood resistant or close flood plains to development. It remains to be seen if common sense will prevail over political pressures.
If you live in any of these areas with concentrated flooding, or if you are interested in learning more about flood insurance in general, schedule a call with our Property & Casualty expert, Steven Sharkey, today.