New Court Decision on Flood Insurance

Gary Woodson v. Allstate Insurance Company is an interesting new decision that just came out of the Fourth Circuit regarding flood insurance, which transfers full jurisdiction over claims relating to flood damage to the Federal courts, subject to the National Flood Insurance Act. This is quite big. Historically, insurance regulation is handled at the state level. Accordingly, there’s not a huge body of law at the Federal level on insurance. So claims relating to flood insurance, even when heard in Federal courts, are often guided by local state rules and regulations. As a result, each United States District has established

Implications of Coarse Data Allocation Methods for Flood Mitigation Analysis

I went looking for a copy of my working paper from the 2013 Joint Statistical Meetings and realized, it does not seem to be online. And neither does my poster! So I figured I should fix that. Here’s a link to the poster and the proceedings paper. The key idea here comes from my work on flood insurance and trying to understand the county-level effects of flood mitigation grants. Some grants are given to state agencies. In other words, the granularity of reality is insufficient for my goals. Normally, it’s just a data problem. So I investigated, briefly, four logical

California Flood Insurance Hurts Everyone

California is considering adopting its own flood insurance scheme, according to this news report: California Considers Ditching Federal Flood Insurance For State-Run Program SACRAMENTO (CBS13) – California is overpaying for flood insurance, according to a report from a UC Davis research group. And now the Department of Water Resources is considering a state-run flood insurance program that could save billions of dollars. “I was afraid to add it up. Apparently, California residents have paid more than $3B more into the program than those residents have received since the NFIP started. So the plan is to exit the NFIP statewide, and

FEMA’s Flood Maps Are Not a Scam

On May 3rd, this article ran in the Hamilton Journal-News. Hamilton fights federal government on flood hazard area AFFECTED PROPERTIES Most of the properties affected are west of where Two Mile Creek passes under Cleveland Avenue and east of Haverhill Drive. Long and short is, local business owner Mike Day was quoted as saying, “It just seems to be one more government-intrusive cost that I would have to end up paying because someone deems it necessary, that has probably never stepped foot on this street.” 1 The quote bothered me enough, that I posted it on Facebook leading to some

Flood Insurance Profits? Maybe Not

NPR has made a lot out of a report that insurance companies made $400 million in profit from flood insurance. This does not seem likely. When I wrote my text on flood insurance, I was unable to disaggregate profit numbers. Also, some of the figures given in the NPR report are simply incorrect. For instance, they show that 1/3 of premiums go to insurances companies. Insurance companies receive 15% to manage record keeping, sales, and claims processing. In addition, companies that sell well get up to 2% more, capping the amount insurance companies are paid at half of the 1/3rd

The Private Flood Insurance Bill

The House of Representatives just passed a bill allowing private insurance to meet the flood insurance requirement for homeowners. In most cases, if you have a federally-backed mortgage, and you are on the 100-year floodplain, you have to have flood insurance. Federally-backed, in this case, means a conforming loan for Fannie Mae or Freddie Mac, or one issued by an FDIC or NCUA insured depository institution. There are some other cases, but that’s most of them right there. The purpose of this requirement is to protect taxpayers from liability through implicit liabilities through the GSE or depository insurance, after a