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

Socioeconomic Effects of the National Flood Insurance Program is now available

I am happy to say my book, Socioeconomic Effects of the National Flood Insurance Program, is now for sale. It has actually been available for a few days on SpringerLink. But now you can purchase hardcopies from Amazon and other websites. From the sales copy: This Brief presents a benefit-cost analysis of the National Flood Insurance Program (NFIP) as well as an evaluation of its cumulative socioeconomic effects. Created by Congress in 1968, the NFIP provides flood insurance protection to property owners, in return for local government commitment to sound floodplain management. Since 1994, the NFIP has included a Flood