Rob's Surf Report

.25B$ in flood insurance payouts prompt reconsiderations

According to a story from the Bismarck Tribune’s website, For some, flood insurance rising, homeowners in the Missouri River floodplain may soon see a serious rise in the cost of their flood insurance premiums.

ALT-TEXT
For those living in the Missouri River floodplain, the cost of flood insurance might leave them underwater. (Photo credit: Rob Ross @ robssurfreport.com)

The rise in rates stems from an insurance program designed to protect homeowners from the potential financial damages arising from seasonal flooding; currently, the premiums of the insurance are subsidized by a federal program that will soon be phased out in favor of remapping the flood-prone areas and increasing premiums to cover the actuarial costs of the program.

The changes may require more homeowners to purchase coverage in some areas where it is currently an option, and in addition to that the rates may more than triple, causing riverside homeowners to reconsider whether it was really wise to buy into an area that was once on the bottom of the river.

“I don’t know why anyone would want to live there,” said Paula Kemnitz of Mandan, ND, in an informal statement made in 2011. “When I was growing up, that whole area was part of the river.”

Since 1978, the flood insurance program has paid more than $257 Million in claims, which makes FEMA disaster assistance appear penny-ante by comparison. As the result of phasing out the federal subsidy, homeowners on Fox Island – a flood-prone area in south Bismarck – may soon see the cost of their flood insurance premiums exceed that of property taxes in many areas of the city, proving once again that the value of real estate is all about location.

In a region where decent homes for sale have become increasingly scarce of late, it appears as though some prime locations may soon be hitting the market —

Would anyone like to buy into that?

This post was prompted by today’s Daily Post prompt.

So far, 62 other responses have posted:

12 comments

  3. In Charleston, flood insurance has blasted off into outer space and is orbiting Pluto. It’s that much more expensive. I’m so glad we got rid of our house when we did, because we were 8 inches below base flood and therefore had to have it. Last year was the first year of increases, and some people paid more than three times as much.

    Reply

    • It just seems so weird to me when I consider that people would cause a river to recede and then build property where it once flowed – a testament to the foolishness – not necessarily of the homeowners, but of the developers, who don’t have to gamble with their personal physical capital that the river is not coming back. I figure the people who move there might not know any better; like if a nomadic people set up camp at the edge of a river, as I’m sure they would, they might not be aware that it’s going to come up soon; but when it does, at least they can pull up stakes and get out of there.

      Which means they don’t need flood insurance! I get the reason for it; who wants to have a bunch of homeless people due to natural disaster? They’re taxpayers and voters, so the government has to take care of them one way or another, so the insurance is mandated. I wonder if it wouldn’t be wiser to mandate that the only thing you can build that close to the river is a public park?

      Reply

  5. Well, I don’t live in this region of the nation, but I do live near the convergence of three rivers. One of them– the Yakima River– does have a flood plain. Two small towns have residents near the banks of the Yakima, and they get flooded out on a pretty regular basis. One of them is Benton City, where I lived from 1978-1984– I remember not being able to get in or out of the city because the main bridge was flooded out, and the north way was dangerous. Most of the residents are poor (redneck, farmer, hillbilly types, and I’m not trying to say that insultingly), so I don’t think they have flood insurance– I’m not sure if it’s even available. The other is West Richland, which has seen an influx of people working for the Hanford contractors, but, well, the Director of Waterworks is named Roscoe D. Slade III (I’m so not kidding).

    Despite this history, I haven’t seen anyone move from their riverside spots. *shrug*

    Reply

    • *reciproshrug* Eh? It goes to show too, that some people have adapted to seasonal flooding and don’t mind it so much – there may be this allure to riverside life that I’ve never been a part of and wouldn’t understand. People are attracted to water in a primal way, I believe, because innately we understand that we need fresh water for survival; the less we have to travel to get to a source of fresh water, the better in any situation.

      Roscoe D. Slade III. That just makes me think of the Dukes of Hazzard! I bet he’s worn a white suit a time or two.

      Reply

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