ipl-logo

Pros And Cons Of The NFIP

1263 Words6 Pages

The National Flood Insurance Program (NFIP) was established in 1968 to address the U.S.’s flood exposure and the challenges inherent in financing and managing flood risks in the private insurance market. Private insurance companies at the time claimed that due to the correlated nature of the flood peril, it was an uninsurable risk and it could not be underwritten in the private insurance market. (King; Congressional Research Service). Although the NFIP has been effective in making flood insurance widely available, the program has encouraged homeowners to buy recklessly in areas that are the most prone to flood damage (Matthews; TIME.com). Today, the NFIP holds $1.2 trillion in loss exposure but collects only $3.5 billion from its policyholders, …show more content…

Ideally, the elimination of NFIP subsidies would adjust financial incentives so as to cause people to either move out of flood zones, or to pay more for the privilege of living in flood zones. (Fox; Columbia Journal).
The failures of the NFIP have been long acknowledged and numerous attempts to reform the program have been made since 1979. The most recent effort to reform the NFIP is the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters), which eliminated subsidized premiums and adjusted premium rates to reflect actual flood risk (Fox; Columbia Jorurnal). The amendments led to significant backlash resulting from the significant rate increases. These oppositions led to the passage of the Homeowner Flood Insurance Affordability Act of 2014 in 2014, which repealed many provisions of Biggert-Waters (Fox; Columbia …show more content…

Many of the barriers for the privatization of flood insurance have been addressed since the establishment of the NFIP 40 years ago. The Federal Government has produced and updated flood hazard data for over 92% of America’s population, more than 21,000 communities in high-flood risk areas adhere to minimum building and land use criteria, and financial instruments such as disaster bonds and auctioning risk, could be used to help manage private insures’ risks (Straw Man Policy; ndfaflood.com). Additionally, advances in mapping, risk modeling and the ability to spread risk globally means that many logistical problems that the insurance industry once faced in insuring flood coverage have been lessened or solved. (Lehnmann; R Street Institution). Several states such as West Virginia and Florida, have recently advanced legislation to increase the availability of private flood insurance (Fitch Ratings; Starr Companies). Private flood coverage is also in many other developed markets, including the United Kingdom, Germany and Australia (Postal). The privatization of flood coverage could also lead to the availability of broader coverage options than what is available under the NFIP, such as business interruption

Show More
Related
163 Words | 1 Pages

The Low Income Home Energy Assistance Program (LIHEAP) helps pay the heating or cooling bills of low-income families or individuals. Households are eligible if their incomes are below 150 percent of the federal poverty guidelines or below 60 percent of state median income. According to data released by HHS and reported by the Congressional Research Service, of all households served by LIHEAP, approximately 29 percent had at least one member 60 years of age or older; 31 percent had at least one member with a disability; and 23 percent included at least one child five years of age or younger. Furthermore, LIHEAP also provides assistance to 153 Native American tribes’ homes.

Read More
1804 Words | 8 Pages

The electoral reform I am suggesting was first proposed by Arthur Schlesinger Jr. in 1978 and it was called the “National Bonus Plan”. The National Bonus Plan is not a dramatic change to the way elections in the U.S. currently take place, but I think the modifications that would be necessary with campaigns and political strategy to be successful in this new era could be productive ones. It retains the current electoral college and many of the same characteristics that are used today, but it awards extra electoral college votes for winning the popular vote. While there are pros and cons to this idea, I believe the positives would outweigh the negatives if we consider a few changes to Schlesinger’s original plan. The original plan proposed

Read More
162 Words | 1 Pages

“For the first time in American history, we have a law authorizing the worldwide and indefinite military detention of people captured far from any battlefield. The NDAA has no temporal or geographic limitations. It is completely at odds with our values, violates the Constitution, and corrodes our Nation’s commitment to the rule of law.” “For the first time in American history, we have a law authorizing the worldwide and indefinite military detention of people captured far from any battlefield. The NDAA has no temporal or geographic limitations.

Read More
3186 Words | 13 Pages

Local interests had to pay one half of what the commissions used to create the levees that made to try to prevent flooding. The district of where the levees were also had the costs and jobs of maintaining the maintenance that the levees needed. River and Harbor Acts were passed along with Flooding Control Act. This all was well with the Mississippi River Commission until the flood that changed it all, the flood of 1927. This flood is still the biggest and most destructive flood recorded.

Read More
60 Words | 1 Pages

The New Deal did not benefited the U.S.in the long term. The New Deal was created between 1933 and 1938 by Franklin Roosevelt. He created the New Deal for people that were unemployed. The New Deal provided old-age insurances and unemployment benefits. It was also was supposed to help the families that dependent children and for people that were disabled.

Read More
246 Words | 1 Pages

The NCAAP was determined to enforce the 14th and 15th amendment. The NCAAP was successful in a few arguments. They won Bailey vs. Alabama in 1911. The 14th amendment freed slaves and the 15th amendment allowed any citizen to vote regardless of race. The NCAAP fought for these rights to be enforced because at this time they were not.

Read More
542 Words | 3 Pages

In chapter one, there is much emphasis on the economic impact of natural disasters. For

Read More
935 Words | 4 Pages

The pros of FPTP are generally considered to be that it is easy for voters to understand and that it is the voting system that people in Canada are most used to. Vote counting is of course a lot simpler too, compared to other systems that would require a lot more rigorous counting systems. Simplicity is obviously a very important part of any voting system, the average voter needs to understand how their vote works. However, the simplicity is often and lack of representation is often used as an example as to why voter turnout is shrinking as many feel like their votes do not matter. Although whether it is a positive or a negative depends on the viewpoint, first past the post does lead to more majority governments than a MMP form of democracy

Read More
563 Words | 3 Pages

I believe we have a far bigger crisis on our hands as it relates to hydro rates for all sectors. The ever-increasing hydro rates are causing increased detriment, for all. Property taxation is the fundamental component of most municipal budgets throughout the world, is 5000 years old and remains problematic. The current form of property assessment/taxation is based on a four year system. Despite property being assessed higher, municipalities have to wait 4 years (phase-in) to generate the market value tax base.

Read More
542 Words | 3 Pages

Based on the descriptive statistics for private risk measures presented in Table 2.3, residential private properties in the town of Old Saybrook are, on average, more vulnerable to flood-related risks than those in Waterford. Accordingly, it is plausible to hypothesize that the impacts on WTP of private risk are different across these communities. That is, the influence of perceived risks (or actual vulnerability) on the WTPs for adaptation methods and outcomes for one group (e.g. residents in Old Saybrook) is not the same as for the other (residents in Waterford). Such an investigation could be achieved by pooling the two samples, and estimating a single utility function that allows for the potential differences in utilities across communities and over measures of private risk variable(s). Prior to this investigation, I disregard the variations in perceived (or actual) risk across the two communities, and estimate a pooled mixed logit model, in which I allow for potential differences in marginal utilities across the two groups via interactions of all attributes with the Old Saybrook binary indicator.

Read More
940 Words | 4 Pages

As per that subsequent disaster, floods can now be prevented by forming a management committee set to prevent that from happenings in every county, they say prevention is better than cure and so the government is coming up with measures to control floods. This is done by sensitizing people who live on lower grounds to move to higher grounds to prevent landslides, digging dykes and also educating citizens on disaster

Read More
722 Words | 3 Pages

We also see that areas of the Mississippi have a lower elevation than that of other rivers. This means that cities like New Orleans, Baton Rouge, etc, will be more susceptible to flooding. All of this flooding has driven a need for increased response, mitigation, preparation, and recovery efforts. The way we increased efforts was done through policy. If you remember

Read More
1501 Words | 7 Pages

Flooding Disaster Flooding - arrive in overwhelming amounts or quantities or large amounts of water. We are going to talk about how flooding destroy people 's lives and homes around the world. One of the country’s worst flooding disasters occurred February 26, 1972, on Buffalo Creek in Logan County in West Virginia. It was about 8.00a.m a coil waste dam collapsed on the Middle Fork of Buffalo Creek releasing 132 millions gallons of water into the city and destroying everything. Next were are going to talk about another bad flood that is the Mississippi river flood of 1927, on September 1 water poured over a dozen streams and flooded towns of Carroll, Iowa to Peoria and Illinois three hundred miles and fifty miles apart.

Read More
955 Words | 4 Pages

Insurance companies are making a huge amount of profit. The profit that these

Read More
991 Words | 4 Pages

To do that, need a lot of food and drinking water, blankets and clothes to keep warm. Cattle may drown, harvests fail. Homes, businesses, hospitals, museums: all buildings that flood will be damaged. How much damage depends on the height of the water, the value of the building and the susceptibility to water damage. A company can be damaged not only directly by the water by also indirectly: it may have to close down and therefore will earn no money.

Read More

More about Pros And Cons Of The NFIP

Related Topics

Open Document