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February 16, 2014

Column: Costal residents should pay true cost of flood insurance

I hear regularly from my liberal – I mean “progressive” – friends and (mostly) Democratic politicians that one of the only ways to confront climate change effectively is to make people pay the “true cost” of their lifestyle choices – the energy they use and the insistence of some of them on living in harm’s way.

But the environmental champions in Congress took a big break from all that moral scolding this past month with a gigantic “Never mind!” after their constituents discovered the law requiring them to start paying the true cost of living in flood-prone areas.

Never mind that it was Congress that passed the Biggert-Waters Flood Insurance Reform Act in 2012, calling for property owners in flood zones to stop getting the taxpayer-funded sweetheart deal that lets them enjoy their ocean view while paying insurance at about half the rate they would pay on the open market.

Not surprisingly, people getting that kind of a deal had little incentive to deal with reality. If there was an especially bad storm and their house was damaged or destroyed, why not just rebuild in the same place? Or, why not develop the coastline to the max when your fellow taxpayers are going to absorb most of the risk for you?

Enough of them did, in fact, to put the Federal Emergency Management Agency’s (FEMA) flood insurance program more than $24 billion in debt. Hence the Biggert-Waters Act, passed by overwhelming majorities in both houses of Congress, instructing FEMA to phase in rates closer to those charged on the open market.

That began happening early last year, with those owning second homes or on properties that changed hands. The rates were scheduled to rise 25 percent per year until they reached that allegedly crucial “true cost” level. Last October, rate hikes started for owners of properties that had been flooded multiple times and also for business properties in areas at high risk for flooding.

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