Reports surfaced earlier this week that a new bill is circulating in Congress that will fund the National Flood Insurance Program for Americans for 5 years. This is a huge step considering that Washington has only funded the program with band aids over the past several years.
Like Social Security and Medicare, the government’s flood program is outdated, underfunded, and needs an overhaul. Word is that there will be price increases with the new program along with higher limits available to insureds. Discounted programs will also cease to exist. Flood maps are being re-drawn in many flood prone areas as well and some zones that were never in specific flood zones will soon be.
No one likes price increases – especially in these times. But the current plan is not working and there must be funds set aside to pay for those in these areas. By spreading the risk around there may be some relief. And don’t forget my argument all along – homes with mortgages are owned by the financial institutions that hold the deed on them. These mortgage companies, banks, and the like need to take a greater responsibility in protecting their investments on the front end. They make sure the home has regular hazard insurance – why not insist on protecting their risk additionally by making their clients purchase flood insurance ?