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The federal flood insurance program must be reformed

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While the National Flood Insurance Program covers only 134,000 households our of North Carolina’s 3.8 million, it will likely pay for repairs costing hundreds of millions of dollars. Add all the damage in other states this year, from Florence and later from Hurricane Michael, which flattened many oceanfront communities along the Florida Panhandle and then tore through Georgia, South Carolina, North Carolina and Virginia. The totals will be breathtaking, especially after the other monster storms of the past two years.

Nationally, the flood insurance program covers about 5 million residential and commercial properties. And like many of those buildings in recent years, the insurance system is under water too. It’s deep in the red — about $20 billion in debt, even after Congress approved a $16 billion write-off last year. Despite that, members of Congress this month reauthorized the program.

While flood insurance isn’t as heavily subsidized as it was in previous years, homeowners in flood-prone areas tend to get far greater benefits for their premiums than they pay in. An Associated Press investigation recently showed that nearly 37,000 properties from the Carolinas to California have repeatedly been flooded and rebuilt — some of them dozens of times — with the federal insurance program’s help. About 18,000 of those properties are currently covered by the program and 15,000 of them haven’t taken any voluntary steps to reduce their future risk, according to the Federal Emergency Management Agency. The repeatedly flooded properties have cost nearly $7.5 billion in claims, before the start of this hurricane season.

If climate scientists’ predictions of more intense hurricanes are correct, the flood insurance program will go even deeper into debt and require even more taxpayer bailouts. And in many cases, the funds are going to expensive shorefront properties that are obviously at risk.

Instead of continuing to act as a traditional insurance program, it may be time to rethink it. The Natural Resources Defense Council, which sued FEMA to get data about the program, warns that the perennially damaged properties are “the canary in the coal mine for the millions of properties in the U.S. that are going to be in the exact same situation in future decades.” FEMA of all federal agencies should know better than to engage in climate-change denial, and it should recognize the need to take a more proactive stance — requiring preventive actions like raising homes on stilts or even buying out the most vulnerable properties and relocating the owners.

For the properties most likely to sustain damage, flood insurance premiums should be more appropriate for the risk. The median premium in 2016 was only $520, or $10 a week. Most of the properties that have been repeatedly flooded and rebuilt are worth an average of $115,000 but the damage claims averaged $150,000. Over and over again.

Coastal residents certainly need the help provided by the federal flood insurance program, but when a home or business is flooded half a dozen or even a dozen times, and rebuilt after every flooding, that’s a clear waste of taxpayer money.

At some point, federal officials need to declare that some places just aren’t fit for human habitation anymore. That may mean entire communities having to move to higher ground, but as sea levels rise, flooding becomes more frequent and storms grow more intense, that may be the best possible use of federal money.

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