Friday, September 25, 2015

Lemann on Flood Insurance

LemanAlexander Lemann (Georgetown) has posted Rolling Back the Tide: Toward an Individual Mandate for Flood Insurance (Fordham Environmental Law Journal) on SSRN.  Here's the abstract:

The National Flood Insurance Program is in flux — and under attack. On March 13, 2014, Congress passed the Homeowner Flood Insurance Affordability Act, delaying and dismantling many of the reforms it had put in place just twenty months earlier, when it passed the Biggert-Waters Flood Insurance Reform Act of 2012. Today, flood insurance is both a critical part of the country’s approach to dealing with the rising flood threat posed by climate change and a beleaguered and perpetually broke symbol of governmental ineptitude, leading to calls for its elimination. By providing federally-subsidized flood insurance, critics argue, the National Flood Insurance Program has insulated flood victims from the risks they face, encouraged development in flood prone areas and, paradoxically, increased the country’s overall exposure to flooding.

This account, however, gives short shrift to the Program’s sophistication and ability to discourage development in flood plains. In fact, the Program’s woes can largely be traced to two intertwined flaws: its weak mechanism for requiring coverage and its hesitation to charge premiums that reflect the actual risk policyholders face. In this Article, I argue that establishing an individual mandate for flood insurance, which would require all property owners in flood-prone areas to maintain policies, would do much to solve these problems and make the National Flood Insurance Program a powerful tool in the ongoing effort to mitigate our growing flood risk. By mandating coverage and charging rates that reflect the risk faced by each property, the National Flood Insurance Program could strike the difficult balance between providing a safety net to flood victims and discouraging flood-prone development, a goal that has eluded the Program over the course of its forty-six year history.

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