Claims from Hurricane Sandy could further threaten the deeply indebted federal flood insurance program that Ocean City property owners rely on and lead to dramatic changes in the future.
A report in the New York Times by Eric Lipton, Felicity Barringer and Mary Williams Walsh suggests Sandy will be the second most-costly storm in history in terms of claims paid.
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Read "Flood Insurance, Already Fragile, Faces New Stress."
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"Congress, just this summer, overhauled the flawed program by allowing large increases in premiums paid by vacation home owners and those repeatedly hit by floods," the New York Times reporters write. "But critics say taxpayer money should not be used to bail it out again — essentially subsidizing the rebuilding of homes in risky areas — without Congress’ mandating even more radical changes."
President Barack Obama signed a bill in July that extended the National Flood Insurance Program (NFIP) for five years, and the local real estate industry breathed a sigh of relief.
Insurers are not allowed to set rates they want to insure. Many leave markets only to be told they must remain in-state on some coverage lines or risk losing others. Remember premiums are NOT intented to provide a buffer in event of loss. They are meant to fully insure the loss they are calculated to cover. And the means to calculate is to offer a product to many that will provide to only a few, at a price that ensures the math works. Insurers are usually frighteningly accurate - actuaries are very good at this math. Where the process breaks down is when it is overly regulated - when the govt forces insurers to offer insurance at prices that are deemed acceptable. Imagine the outcry if insurers came to homeowners in Monmouth after the storm and said "ok - market rates for all" and the premiums on all houses here jumped 10 fold? If someone making 65,000 gross per annum but who has lived in their house for generations was told they now must pay 8,000 per year for homeowners not 800? Making up the numbers but the point remains. The govt is in this because it has chosen to be in this.
When you find yourself in a hole, stop digging!
My parents live down in Florida on the Gulf Coast and despite never filing a claim for anything but minor damage after the several hurricanes they've been through, their homeowners insurance cost is outrageous, and that's when they can find a company that will cover them. I imagine New Jersey coastal residents will see many of the big insurers refusing to renew their homeowners insurance after paying out their claims.
The shore areas, who generate a disproportionate amount of taxes, should keep those "extra" taxes they send to Washington and their respective states for use as they deem appropriate. ie. beach protection. Then there would be no problem. You have your way a we have ours.
The only thing I can say that may be on point to your comment is that I believe in a free country, but not one free of government. As to health care, there is a broad consensus among economists, especially public health policy specialists, that the most efficient means of delivery is a single payer system (with one entity, perhaps the government, providing and administering the insurance, but, not, as people often misunderstand, providing health care). I mention that because you brought it up but I do not get the connection.
Are you able to demonstrate how a single payer system lowers costs which is the problem. Costs are always the problem ie budget deficits. Too many costs