Get Government Out Of Insurance Business
In regard to U.S. Sen. Joe Manchin III and flood insurance:
There is no question that every year floods cause a tremendous amount of damage to homes and businesses in West Virginia. Most people affected are financially strapped by their losses. It is only natural that individuals think of insuring against flood damage.
In his recent op-ed on flood insurance, Manchin set forth the standard leftist principles of “redistribution of wealth, big-taxes, big-spending, and big government.” He didn’t forget one taxpayer-funded give-away program or subsidy. You could almost envision his tears welling up as he showed his “compassion” while “feeling our pain.”
Joe tells us that Congress and the president (the Feds) created the NFIP (National Flood Insurance Program) in 1968 “because the private sector generally avoided flood insurance – the risks were too great.” This act put the Feds directly in the insurance business, a great distraction from their “governing” duties.
The NFIP is a massive redistribution of wealth boondoggle. There are many hundreds of thousands who live completely free of flood threats but they are forced to subsidize the flood-prone areas of America with part of their taxes.
This subsidy hides the true cost of flood insurance because subsidies allow government insurance premiums to be much, much lower than private market rates. And with such low insurance rates, many builders and homeowners choose to build and live in places that are unsuitably located in or near flood-plains. But they build anyway; for after all, their “cheap insurance” will cover any damages.
As evidence that NFIP premiums are too low, Joe tells us that “in recent years, claims have eclipsed premiums, most notably in 2005 when Superstorm Sandy and other subsequent disasters put NFIP $25 billion in debt.”
The Feds, as usual, impose laws upon us with “unintended consequences” (Obamare, anyone?). When they recognize their screw-ups, they then pass more legislation that mucks things up even worse.
Joe tells us that the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 was supposed make NFIP economically sustainable and premiums affordable. The “unintended” result? Joe tells us one West Virginia family’s premium went from $1,000 to $10,000 a year.
Now good old Joe is sponsoring new legislation to “fix” the present mess. He proposes a four-year delay in the new premium levels, along with other rigamarole and sleight-of-hand to reduce the impact of higher premiums.
In the meantime, flood-free property owners across the nation will receive higher federal tax bills in order to subsidize those who put their buildings in the wrong places.
The Feds have no business being in business of any kind, much less the risky insurance business. Let entrepreneurs and the marketplace conduct all business in the U.S.A. and let the Feds stick to governing, if they ever figure out what it really is.
David Michael Myers