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Location: Anderson, IN, United States

Tuesday, October 11, 2005

Fool Me Once, Twice, Three Times...

Idiocy rises to the top, bouyed by greed and selfishness. That seems to be one explanation for FEMA's continued support of building in flood-prone areas.

A Washington Post Oct 11 front page story by Gilbert Gaul said, "The pattern of federal flood payments on Dauphin Island [AL] illustrates the growing share going to properties that get hit over and over. Federal data show that 300 buildings with multiple losses account for more than two-thirds of all flood payments the town has ever received -- $21.3 million. Katrina claims could add tens of millions."

He continued, "Nationally, properties with multiple losses account for about 25 percent of the flood program's losses while representing 2 percent of all insured property."

Now, if we are learning lessons at all, we shouldn't be insuring two-time loser properties, especially when those risks are underwritten by the very people who have enough sense to stay away from hurricane magnets like Dauphin Island.

If the builders on that island (and countless other coastal properties) can't get private insurance, they need to reassess their plans. They have no right to expect "the federal government" (the rest of us) to pay for their folly. Sure, they pay premia to FEMA, but those payments are obviously below market value (or the market would take care of the insurance). The government has no right to subsidize insurance payments for anyone; and it's irresponsible to use our money to effectively encourage already-stupid people to do ever-more-stupid things.

Beyond the obvious, the federal government's insuring anybody for anything is a conflict with what's left of free enterprise in the insurance sector. Private insurers provide a measure of 'concept-checking,' as people consider building in risky places; cheaper insurance than experience shows would be prudent (FEMA insurance) merely encourages uneconomic behavior.

I have no problem with anyone's building wherever he or she wants; I just don't think it's my job, as a taxpayer, to make it easier for them to set themselves up for a fall. Further, I don't see where there is any constitutional permission for the federal government to be doing anything like getting into the insurance business.

If the economies (government coffers) of Dauphin Island and other flood-prone places suffer because people don't rebuild there, that's too bad. With fewer residents and properties to regulate, they wouldn't need so much money, anyway.

And maybe people should pay their own way to live where they want, whether it's in a sensible place, or some risky venue like, um, places where it floods all the time.

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