More Federal flood insurance info

Ok, here is an interesting article. I’m surprised that FIMA is thinking about whether they plan to recoup the losses via higher premiums. I’ve looked at the numbers for FIMA and it appears (from their reporting) that the organization has been mostly self sufficient since 1978. I do however, believe the government is playing fast and loose with potential liability for claims. Most insurance companies would have looked at the numbers for a 50 or 100 year event disaster in a city on the sea and is below sea level, and would have had to line up funds to ensure they could pay in the event of a 50 or 100 year disaster event. The government run insurance company does not have to meet reasonable reserve requirements that any private insurance company would have to meet. The government run isurance company can simply get the Federal government to to write a check when the coffers are empty. Then the federal government either collects the money, from you, or borrows it the money and repays the principal and interest on the loan. Once again the principal and interest paid comes from you (and me).

You have to love the CATO institute, they were complaining when complaining wasn’t cool…

This entry was posted on Wednesday, September 7th, 2005 at 6:50 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.