In "Flood Victims Getting Fed Up With Congress," a Sept. 25 front-page article in the New York Times, people who lost their homes in Pennsylvania because of recent flooding of the Susquehanna River voiced indignation that emergency aid from the government was being held up by the budget battles raging in Washington.
The article noted that people "traumatized by the loss of their homes were further disheartened by word that FEMA's disaster-relief fund was running short of money."
Left unsaid in the article is the fact that flood insurance was available at a relatively low price through a government-subsidized program to those in the article expressing anger over government inaction.
How do some in the insurance industry feel about bailing out the uninsured?
Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, says, "Demanding payment from a policy you never actually bought could only make sense to people in Washington."
He adds: "Make no mistake about it. We have a National Flood Insurance Program that is more than $17 billion in debt because it offers highly subsidized flood policies—and now we have people trying to make a serious argument that those who chose not to buy flood insurance should be able to file claims and collect payments.
"Why on earth would anyone ever buy an insurance policy again if they just thought the federal government would be there to bail them out and reward their poor decisions?"
Eli Lehrer, director of the Center on Finance, Insurance, and Real Estate for the Heartland Institute in Washington and a consultant to states and insurers on catastrophe issues, agrees. He says the entire purpose of the NFIP "is seriously undermined if the federal government steps in to rebuild flood-destroyed houses of people who did not purchase flood insurance."
He adds: "Homeowners need to take responsibility for their own homes. Period."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.