6/5/2014 - Should the NFIP be privately owned and operated
Ever since 1968, the National Flood Insurance Program has been the primary system by which businesses and homeowners are compensated for losses following an event where high water levels result in property damage. However, one of the country's most well-known lawmakers believes that the NFIP should be reconstructed so that the government isn't as involved.
New Jersey Governor Chris Christie recently recommended this during an event in Berkeley, N.J., where many live in high-risk flood zones.
"The federal government has to get out of the flood insurance business," said Christie, according to local newspaper Asbury Park Press. "It's not good at it."
As most people may be aware, the NFIP is a government program, but it is sold through private insurance companies. Though plan prices vary, some believe that if the program were to be taken on entirely by the private sector, rates would diminish further. But that's not what insurance experts say would happen.
"People have this sense that if you don't have the government involved, if it were only up to private enterprise, insurance rates would be lower," Loretta Worters, vice president of the Insurance Information Institute, told APP.com. "That's not what's going to happen."
She added that, if anything, plan prices would likely increase, as the government provides federal subsidies.
Opinions about the NFIP and how it ought to be run will likely remain. In the meantime, spring is flood season, which puts property owners at risk if they don't have a plan in place. Residents along the East Coast may be acutely aware of this, as New Jersey, New York, Louisiana, Connecticut and Florida saw the highest number of claims in 2012, the latest year for which data is available, according to the Federal Emergency Management Agency.