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Flood Insurance Raises Ire of Michigan Residents

by Candice Miller on April 20, 2011

Flood Insurance Raise the Ire of Michigan Residents

by John McTaggart

Residents from all over southeast Michigan gathered Monday evening at MacRay Banquet and Event Center in Harrison Township to voice their thoughts and concerns over the government’s National Flood Insurance Program (NFIP), as well as hear presentations from various state and federal agencies.

The event, organized by State Representative Anthony Forlini (R-Harrison Township), included members of the state’s House Committee on Natural Resources, Tourism and Recreation, along with representatives from the Federal Emergency Management Agency (FEMA), U.S Army Corps of Engineers, Michigan Department of Environmental Quality (DEQ) and U.S. Rep. Candice Miller.

“I think FEMA needed to know that people are upset,” Forlini said. “They weren’t getting the message. I think they got the message today.”

Numerous residents voiced their concerns over the course of the two-hour-plus hearing, many citing the excessive costs of the policies, along with whether or not the policies were actually needed in the first place.

As the system currently stands, Congress mandated federally regulated or insured lenders to require flood insurance on properties that are located in areas at high risk of flooding.   

A high-risk flood area is defined as an area that has a one-percent or greater chance of flooding in any given year, which is equivalent to a 26-percent chance of flooding during a 30-year mortgage.

“I think that Michigan, and many of the Great Lakes states, have been financially disadvantaged by this program,” Miller said. “I think we are subsidizing, unfairly, this program.”

The statistics appear to support Miller’s claim.

According to a Congressional Research Group, over the life of the NIFP program, which was originally passed by Congress in 1968, Michigan actually received less than 16 percent of the premiums paid in the form of claims. 

By contrast, the state of Louisiana received 400 percent return on their claims.

In addition, in 2010, Michigan residents paid 69 percent higher premiums than residents in Florida, and 18 percent higher premiums than residents in Louisiana. Meanwhile, the average value of insured property in Michigan was 40 percent lower than Florida and 37 percent lower than Louisiana.

These numbers have prompted Miller to craft a bill (H.R. 435) that calls for the elimination of the NFIP by Dec. 31, 2013—a program that is currently $19B in debt.

“Michigan has been turned into an ATM machine—forced to pay for the flood risks that our state does not actually face,” Miller said. 

St. Clair Shores resident Derek Thomas was one of dozens who attended the meeting.

“I got a bill from FEMA for $1,908.52,” Thomas said. “It’s got to quit. It’s got to. This is ridiculous. These water levels are not going to come up to what these people say they are, and yet we still pay like they are going to. It’s ridiculous. We’re just paying for what’s happened down South, that’s all.”

Chesterfield resident Amy Sabaugh says flood insurance is nothing more than legalized extortion.

“The government is telling me to pay for something I don’t even want,” Sabaugh said. “They give me no choice, nothing. I get an $1,100 bill for something I wouldn’t choose to have, and if I don’t have it, it’s against the law. That’s not right at all. That seems like extortion to me—pay or else.”

A portion of Monday’s meeting centered around just how FEMA determines what and where flood plains exist in the area. 

Maps, overlays and bulleted points were presented to the crowd by the DEQ—outlining just how flood maps, known as Flood Insurance Rate Maps (FIRM), are used to determine where high-risk flood areas are located.

“I think the presentation was great,” Harrison Township resident Tony Arminni said. “But all I know is I live on the water and I pay a lot of flood insurance every year. But, the water in front of my house is so low, and has been so low for years, that if I walked in I wouldn’t even get my knees wet. But, they want to make sure I’ve got insurance in case that water rises 15 feet and floods my house. It’s not going to happen.”

FEMA External Affairs Officer Mark J. Peterson saw Monday’s meeting as a very informative and productive one from the agency’s perspective.

“I find these meetings very informative,” Peterson said. “Both in terms of us getting feedback, and hopefully, the public gets more information of their risk and what the program does.”

Forlini says the next step he’ll take is to introduce a resolution that supports Congresswoman Miller’s efforts in Washington to address the issue.

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