Flood insurance is socialized in America. Private sector insurers do not write flood policies, and they exclude flood damage in homeowner and commercial P&C policies. FEMA manages the National Flood Insurance Program, which is underwritten by US Federal tax dollars. Lenders often require Flood Insurance on new and existing property loans and mortgages.
Every so often, FEMA takes a regularly scheduled look at the historic hydrology they use to define flood plains and recomputes flood insurance rates for homeowners and businesses. The new Flood Insurance Rate Maps [FIRMs 2013] were unofficially released this spring.
Well, due to the sea level increase and increased severity of storms and increased Flood Insurance claim payments in the last 36 years, America now has a lot of new flood plains and a lot of higher Base Flood Elevations and storm surge zones. Keep in mind that Sandy and Katrina are statistical pixels over a 30+ year cycle, and have little to do with flood insurance rates. Welcome to climate change...
When Catherine Porthouse bought a home in 2010 in the bayous of Louisiana, she didn’t worry much about the possibility of flood damage. Her house, in the town of Des Allemands, is shielded by marshlands and a levee and had no history of problems. Flood insurance wasn’t required, but she purchased a policy just in case.
In March, Porthouse got a rude surprise. The Federal Emergency Management Agency announced at a town meeting that it had rewritten the state’s flood maps and added her house and hundreds of others to Louisiana’s flood zone. She was told she’ll have to raise her house 8 feet into the air and fill in the space beneath it. If she doesn’t, her yearly flood insurance bill will jump from $388 to $18,000. “I left in tears,” Porthouse says.
http://www.businessweek.com/articles/20 ... eir-houses