Today’s Mobile Register carries the article below in the on-going debate over the National Flood Insurance Program. To sum up the article, the problems surrounding the NFIP boil down to three main points:
- Lenders issuing federally backed mortgages to property owners in high-risk areas do not always require those property owners to hold flood insurance, a requirement of the NFIP.
- Local governments do not do a good enough job with land use and zoning plans, allowing high-risk development to take place, shifting added risk to the NFIP
- The NFIP was intended to be self-supporting. However there is a growing realization that the program subsidizes “hundreds of thousands” of policy holders who in some cases are paying as little as 35% of the true risk cost of their policies.
The last point above is the one causing the most concern, particularly within the Senate Banking Committee, which is chaired by Republican Senator Richard Shelby of Alabama.
