For many owners of uninsured homes in flood zones battered by superstorm Sandy, federal recovery grants came with daunting news: Under a policy set in 1994, this will be their last federal flood aid if they don't buy and maintain flood insurance in the future. But even that policy, while fairly compassionate, is far too expensive for the nation's taxpayers. In time, it should end, and there shouldn't be any federal aid for flood-zone residents who don't buy the insurance, even if it's their first disaster claim.
Flood-zone occupants who had damage but no policies from the National Flood Insurance Program can get post-Sandy disaster aid. When they do, though, they'll find their disaster-relief checks shy $600. That money will go toward three years of insurance, at $200 annually, that provides up to $31,900 in coverage, a minimal amount. The maximum coverage available is $250,000 for a residence and $500,000 for a commercial property. About 80,000 properties on Long Island (including many not in flood zones) are covered by flood insurance, out of about 1 million residential and commercial structures. A recent study by the Risk Management and Decision Processes Center at the Wharton School in Philadelphia concluded that along the entire New York coast, only a couple of ZIP codes have flood insurance participation rates of more than 30 percent.
Experts say that, even among homeowners with federally backed mortgages in flood zones, who are required by law to carry the coverage, at least half let their policies lapse. In a system that pays flooded-out residents who neglected to buy a policy, that's not surprising.
Changing the regulation effective immediately would not be fair, but a law with a date certain -- say, that no one living in a flood zone could get federal help if they didn't buy flood insurance by one year from today -- would be.
Along with such a change, the Federal Emergency Management Agency would have to be proactive -- to the point of badgering -- to make property owners aware that they are in a flood zone, particularly when maps change to include previously excluded properties.
In addition, properties newly included in flood zones should get a year's grace period before they become ineligible for federal aid if their owners decline to buy a policy.
Founded in 1968 to create a broad-risk pool of flood-prone properties and provide insurance against encroaching waters at a rate that reflected the risk, the National Flood Insurance Program is $18 billion in debt. And that's before Sandy. The federal government is floundering to pay massive disaster bills, along with all its other massive debts, and the flood insurance program has generally -- thanks largely to political pressure -- set rates far lower than is justified by the risk.
There are reforms that can make those who own in flood-prone areas take on more of that risk themselves: Experts suggest significantly higher premiums on existing and new structures, tougher construction standards in danger zones, and limited payouts to repeat flood victims. These are policies that would, in some cases, make life much tougher on people in flood zones, but they are also reasonable and fair.
People who own property in flood zones can't be forced to buy insurance, but given enough notice and warning, they can and should be denied federal assistance if they don't.