Reply #16: There are no private flood insurers now... [View All]

[Polemicist]

Flood insurance is all Federally underwritten. Local insurance companies just handle the paperwork for a small commission. That will not change.

In fact, the Federal government has been trying hard for years to mandate that everyone purchase flood insurance in Federally determined flood hazard zones. They have even gone so far as to declare some communities out of compliance with flood coverage, due to critically low levels of coverage.

They have made mortgage companies require flood coverage with mortgage loan in flood zones. But in mature communities like New Orleans, with lots of older homes that are paid for in full, or with small older mortgages, there is no way to require the owners to purchase flood insurance coverage.

Lack of flood insurance coverage will be the greatest loss of wealth in this New Orleans disaster. Many will lose everything with absolutely no insurance at all.

What will the government offer them? Subsidized loans. But little real aid to rebuild.