By subsidizing flood insurance by allowing an unlimited number of claims, the insurance program serves to increase other types of federal disaster costs, Lehmann said. “If people weren’t living there, then there would be less disaster assistance necessary,” he said.
FEMA didn’t immediately respond to a request for comment.
Congressional Action
Congress worried about the perverse incentives of the flood insurance program long before Florence. In 2012, Congress passed legislation phasing out the subsidies offered to homeowners, increasing premiums in places like coastal North Carolina. Homeowners objected, and Congress rolled back those changes in 2014.
Then, last year, the House passed a bill that would limit the amount of money a home could get from the flood insurance program to three times the value of that home.
The bill didn’t clear the Senate.
“People that live in this cycle of flooding and rebuilding may never even be offered assistance to move somewhere safer,” the NRDC’s Moore said. “If they have flood insurance, they’re always offered the option to rebuild in the same location.”
This article was provided by Bloomberg News.