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Politics : The Trump Presidency
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To: Wharf Rat who wrote (32215)9/2/2017 12:03:15 PM
From: Katelew1 Recommendation

Recommended By
TimF

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You are correct.

I read up on FEMA and learned that the so-called flood insurance is not actually insurance. Real insurance has pools of real assets (stocks, bonds, etc.) to pay claims with. Government flood insurance is simply a taxpayer IOU.

If one lives in a flood zone and has a mortgage, he must pay 'flood insurance premiums' to the fed. govt. The program, though, is underfunded. It doesn't charge enough to come anywhere close to funding the payouts. Put another way, right now 5% of the country live in flood zones and own flood insurance. If all of those areas had claims in one calendar year, the combined payout would be 1.3 trillion. At the moment, our gov. flood insurance is (I think) around 25B in the red.

So 'flood insurance' is relatively cheap, and critics have, for many years, complained that it mainly serves as a subsidy for those fortunate enough to own beachfront property.
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