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Fed flood insurance program unfair to state homeowners

by Candice Miller on July 18, 2011

Editorial: Friday, July 15, 2011
Fed flood insurance program unfair to state homeowners
Macomb Daily
http://macombdaily.com/articles/2011/07/15/opinion/srv0000012476113.prt
The U.S. House voted this week 406-22 to add five years to the life of the National Flood Insurance Program.
 
With opposition amounting to nearly 20 to 1, is the minority simply out of step with reality?
 
In this case, we think not.
 
In fact, we applaud Michigan lawmaker Rep. Candice Miller for taking an obviously unpopular stand.
 
Miller, a Harrison Township Republican who represents portions of Macomb and all of St. Clair Counties, favored dismantling the NFIP by Dec. 31, 2013, allowing states enough time to form regional insurance compacts to spread risk, while continuing to allow the Federal Emergency Management Agency to assist in their efforts to produce high quality flood maps, as well as assist states and the private sector to insure against flood loss.
 
In arguing her point on the floor of the House, Miller minced no words: “I am strongly opposed to the underlining bill — the National Flood Insurance Program. And I would start with this basic premise: why in the world is the federal government even involved in the flood insurance business? Is that the core purpose of being the federal government? It’s ridiculous. This program was started in 1968 and the government began writing policies in the early 1970s, and no great surprise, the federal government is doing a lousy job of being in the insurance business.”
 
Statistics put together by Miller’s staff also show an imbalance in premiums versus claims, even though Michigan has fewer homeowners required to have flood insurance because they live in declared flood plains.
 
A media advisory from her office states: “Currently, Michigan enrollees in the NFIP are paying more premiums to the NFIP than enrollees in Louisiana or Florida. For example, from 1978 to 2010, Michigan residents paid $284.4 million in premiums and received $45 million in claims versus those in Louisiana who paid $3.9 billion in premiums and received $16 billion in claims.”
 
The flood insurance program is more than $19 billion in debt, just another example of our government’s inability to operate efficiently and within a budget.
 
We understand that some insurance companies may shy away from offering policies in high-risk areas, but we’re not convinced that multistate regional insurance compacts would not solve that problem.
 
But once again, rather than try something different — and less expensive — our leaders in Washington would rather stick with the status quo as American taxpayers watch the deficit continue to grow and wonder what far more important program will face federal cuts.

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