The important concept to remember here is that most NFIP insureds adversely select the coverage thus the slabbed from St Bernard Parish would be far less likely to buy the coverage if they moved to a high and dry area that has never experienced flooding despite the very cheap premium. Against that backdrop and given the looting of the NFIP by private insurers after Katrina I was tickled by Donelon’s appearance yesterday on WWL radio: (H/T the Ladder)
The 2009 hurricane season starts in three weeks, and state officials are expressing concern over an apparent dropoff in the number of homes covered by the federally-backed national flood insurance program.
State Insurance Commissioner Jim Donelan says the declining number of homes under the federal umbrella bothers him.
“We’re seeing a decrease, this year to last, of four percent in the amount of polices in effect in the state of Louisiana,” Donelan said.
Donelan says that as memories of the destruction caused by the 2005 storms fade, homeowners are getting more lax with their coverage.
He says that every property owner and renter in the New Orleans metropolitan area should participate in the national flood insurance program, even those in areas considered “flood proof.”
The populace here has been conditioned by Katrina and its aftermath. After all, the federal governemnt will pay for everything, from wind coverage that should have been covered by private insurance to the rebuilding tab for those who always thought flood insurance was a waste of money. And those that moved away from their pre-Katrina communities to much higher ground don’t see the reason to continue coverage so that wealthy Alabamians can continue the cycle of rebuilding beach houses on barrier islands only to be destroyed a few years later in the process becoming the NFIP poster child for all that is wrong with the program.
To get a glimpse of FEMA-promoted maldevelopment, there’s no better place to visit than Dauphin Island, Alabama.
Fourteen miles by 1.5 miles at its thickest, with some 2,000 winter residents and as many as 15,000 summer visitors, Dauphin Island has been repeatedly hit and reshaped by tropical hurricanes, including Frederick in 1979, Danny and George in 1997 and 1998, Ivan in 2004 and Dennis and Katrina in 2005. From the water, the island’s narrow west end looks like a forest of wooden stilts atop which several hundred houses have been temporarily secured. You could fish off the decks or out the bathroom windows of many of them where the storm-eroded sand has retreated under their pilings. After Hurricane George, FEMA spent millions of tax dollars to protect the single road to the west end, without requiring any additional public access to what’s left of the beach.
In 2004, Hurricane Ivan delivered a glancing blow to Dauphin, destroying 50 west end homes and badly damaging another hundred, leaving a rubble of wooden debris, grounded boats, and two new ocean channels in its wake. Yet again FEMA returned to help vacation-rental developers rebuild in harm’s way.
After Hurricane Katrina, there are more than 200 homes destroyed on the west end (many of whose owners are now collecting their FEMA insurance checks from last year)……… A $1.1 million protective sand berm built by FEMA after last year’s hurricane has vanished into the sea.
(I have another post coming on the propensity of the editorial board at the Mobile Press Register to keep their heads inserted up Senator Dick Shelby’s rear end instead of looking in the mirror for the causes of the multitude of problems in the NFIP.)
Having heard several accounts of Mr Donelon’s legal advice to Bob and Merryl Weiss regarding their suit against Allstate I understand why the people in Louisana don’t take him very seriously when it comes to buying into the NFIP as the story continues:
Donelan notes that flood damage isn’t covered by regular homeowner policies, and that, under federal rules, you won’t be able to get the flood coverage while there’s a storm in the gulf.
For our part we’re trying to find out what a homeowners policy actually covers without the policyholder having to file suit to collect.
sop
Good ole Jim. With friends like him who needs enemies?
This is why there is a drop in NFIP market penetration in Louisiana (and Mississippi):
If you got FEMA assistance for uninsured flood damage, NFIP used some of the money to buy a 3-year flood policy. It expired and now you have to buy it yourself.
http://www.fema.gov/news/newsrelease.fema?id=46284
Group Flood Insurance Policies Expiring Soon
Release Date: October 9, 2008
Release Number: 1603-808
NEW ORLEANS, La. — Following hurricanes Katrina and Rita, group flood insurance policies were purchased on behalf of 36,285 Louisiana homeowners through the National Flood Insurance Program. If your home received damage due to Hurricane Katrina and/or Rita, your coverage will end Oct. 28, 2008 or Nov. 23, 2008 respectively.
A letter informing homeowners their coverage under this policy is set to expire was sent to individuals affected by Hurricane Katrina on Sept. 10 and will soon go out to those affected by Hurricane Rita on Oct. 9.
The existing Group Flood Insurance Policy, which was funded for three years through FEMA’s Individuals and Households Program, is NOT renewable. It is the responsibility of the homeowner to purchase and maintain a Standard Flood Insurance Policy when the Group Flood Insurance Policy expires. If either the homeowner or the previous tenant/homeowner received assistance from FEMA as a result of a previous disaster and the current homeowner does not continue their coverage, they will not qualify for future Federal disaster assistance, including Federal loans and Individuals and Households Program awards.