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Editorial: Disaster insurance needs better approach

Sat., Nov. 24, 2012

New York Gov. Andrew Cuomo is reportedly preparing a request for $30 billion in federal aid to help repair the damage done by Hurricane Sandy, and then some. Other governors will join him in line.

Sandy exposed the vulnerabilities of tunnels, bridges, airports and subways never designed to withstand forces, natural and man-made, like those that struck Oct. 30. Thousands of homes in places like Breezy Point squat on glorified sandbars just a few feet above a rising sea level. The catastrophe there was amplified by a fire that swept through the densely packed neighborhood.

President Barack Obama promised aid to help Sandy’s victims recover.

Compassion is clearly in order, but so too are questions about why governments continue to subsidize risky behavior, often by individuals who build mansions with little to protect them but sand dunes. In the mountainous West, many build cabins deep in the woods, where their protection concentrates firefighting resources that might otherwise be used to contain flames before they scorch thousands more acres.

Entire towns have been swamped, and rebuilt, on floodplains weary levies could no longer defend from repeated “100-year” floods.

Congress made a good start this summer toward making some of this foolishness more costly by updating the tattered National Flood Insurance Program, which covers 5.7 million homes, including hundreds in Spokane County. Hurricane Katrina blew up the program, which was $18 billion in the hole as of June.

Now, owners of those luxurious second homes on the shore, and those everywhere subject to repeated flooding, will be paying much higher premiums. Increases of as much as 25 percent per year for five years are possible on some properties.

But unless the weather abates, the additional premiums are unlikely to fully cover claims. Sandy alone will result in more than 100,000 claims for an estimated $7 billion, that against a provision in the law that would limit new debt for the program to $3 billion.

The law also calls for remapping flood plains. In a small irony, New York’s senators in June trumpeted a decision by the Federal Emergency Management Administration, which administers the flood insurance program, to delay the imposition of higher premiums on some homeowners until the agency could complete a new Jamaica Bay flood map.

Jamaica Bay is the estuary behind Breezy Point and adjacent devastated neighborhoods.

Cuomo is looking for money to bolster New York’s infrastructure against the next Sandy, but where to find that money on the edge of the “fiscal cliff,” and the nation in need of an estimated $138 billion per year to rehabilitate crumbling transportation assets?

Obama’s $800 billion stimulus package was discredited because too much was spent on people, and not enough on pavement. New York City alone received almost $9 billion. Less than $1 billion went to infrastructure.

The Congress must not let Cuomo kick Sandy in its face.