Want to rail about wasting taxpayers’ money?
The National Flood Insurance Program might be a place to start, according to aby the Union of Concerned Scientists. The flood insurance program, funded by taxpayers nationwide, is rife with problems, according to the organization.
Here's a short list of shortcomings the union identified:
Artificially low insurance rates encourage risky development in coastal areas. Flood maps do not accurately reflect the risk of flooding, especially with global climate change projected to cause sea levels to rise. Repeated payments to the same high-risk properties in coastal areas -- almost $9 billion nationwide since 1978.
The report also highlights many of theby New Jersey policymakers in the wake of Hurricane Sandy, including where and how should rebuilding occur at a Jersey Shore ravaged by the superstorm; should some structures in ; is the state failing to plan for future storms?
New Jersey is a prime testing ground for most of those issues. The state ranks fifth in the nation for flood-insurance policies, with nearly a quarter of a million issued by the federal government. Owners of those policies paid out $234 million in premiums to obtain more than $56.8 billion in insurance coverage, according to the report.
In last fall’s Hurricane Sandy, the state suffered more than $37 billion in damages, most along the Jersey Shore, but some in flood-prone areas in northern New Jersey. The national insurance program, run by the Federal Emergency Management Agency, is funded by taxpayers, a development spurred by the fact that many private insurers have left the coastal insurance market because of its risks.
FEMA did not respond to a call for comment on the flood-insurance program.
With repeated disasters occurring along coastal regions in the past, the cost to taxpayers is mounting. As of last fall, the national program provided 5.6 million flood-insurance policies across the country, covering approximately $1.25 trillion in potential damages to those properties.
The program is also bleeding money, incurring more than $20 billion in debt since a series of major storms dating back to Hurricane Katrina. By the time storm claims from Hurricane Sandy have settled, the total could approach $30 billion, according to the report.
Future solvency of the program is in doubt without significant reforms, according to a report by the Government Accountability Office in 2011, a recommendation endorsed by the UCS report.
The nearly $9 billion paid out since 1978 toamounts to roughly one quarter of all payments made by the NFIP in that period, according to the study, “Overwhelming Risks: Rethinking Flood Insurance in a World of Rising Seas.’’
The prospects for radical change in the future are unlikely, according to the report. Even though repetitive-loss properties only account for 1.3 percent of NFIP policies, they are expected to account for 15 percent to 20 percent of future losses, the report said.
“The problem is twofold,’’ said Rachel Cleetus, a senior climate economist at UCS and author of the report. “The coasts are becoming more populated and built up, so we have more people and more valuable property in harm’s way. The result is that coastal residents and business owners are at increased risk and taxpayers nationwide are looking at shelling out more money to help with post-storm rebuilding efforts."
Tim Dillingham, executive director of the American Littoral Society, an organization geared to protect the state’s coastal areas agreed.
“The report really points out the fact that the vulnerability and risks many of these communities are facing are of our own doing,’’ Dillingham said. “It is an issue that is lost on how we should rebuild New Jersey.’’
To deal with the problems, the UCS recommended changes in the insurance programs and more aggressive steps to reduce greenhouse gas emissions that contribute to global climate change.
“We urgently need to reform our insurance system to more efficiently manage and reduce these coastal risks -- risks that are projected to grow in a warming world,’’ the report said. Nearly three million people nationwide live less than three feet above the average tide level, the report noted.
“We’re turning a blind eye to what may happen again,’’ Dillingham said.