Taxpayers to foot bill (again) as serial claim properties keep getting rebuilt

mii industry-news-8In the wake of Hurricane Florence’s destruction, a new report finds that the federal flood insurance program – funded by taxpayers – continues to pay for the repairs of flood-prone properties that constantly file costly claims.

Now downgraded to a tropical depression, Florence will continue to produce heavy rains over much of North Carolina and Northeastern South Carolina, the National Weather Service said in its latest update on the storm. The agency additionally warned that flash flooding and catastrophic river flooding will continue “over a significant portion of the Carolinas.”

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News of flooding in the Carolinas is yet another blow for taxpayers, as the National Flood Insurance Program (NFIP) could once again foot the bill for damages in communities that are historically vulnerable to flooding.

In a special report, Common Dreams found that the NFIP is “subsidizing risky development.” Citing a previous study by ProPublica – which compared a map of areas expected to be hit the hardest by Florence versus a map by the Federal Emergency Management Agency (FEMA) which tracked the most flood-prone properties – the news portal said that the same properties identified in both maps could be affected by the storm and submit the same types of costly claims they have been filing for decades.

High-risk areas identified by ProPublica include communities along the Pamlico River and North Topsail Beach; homes in both areas have received multiple flood payouts from the NFIP as far back as 1978. One property in North Topsail Beach has received nine separate payments totaling $77,000, despite the value of the property being just $37,125. Another Topsail Beach property has received 10 payments worth $467,000 despite a building value of $300,000.

FEMA has classified these properties – along with 1,132 other buildings across North Carolina – as “severe repetitive loss” structures, since they have been flooded and rebuilt again and again through the NFIP. Properties classified as “severe repetitive loss” structures have made at least four claims worth over $5,000 each since 1978, or two claims with a combined value worth more than the building itself.

There are more than 35,000 such properties nationwide, FEMA said.

Although there have been attempts to reform the NFIP to account for the huge payouts it gives to these serial claim properties, officials have held back. Raising NFIP premiums could make flood insurance unaffordable for lower-income residents – which could be problematic, as the insurance is a requirement for federally backed mortgages of homes in flood-prone areas.

The NFIP is currently over $20 billion in debt.

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