However, when the federal government and its regulators get involved, perhaps the taxpayers would mind having their tax dollars funding those programs and agencies.
Take FEMA which has established minimum building standards which provide the backbone of the NFIP building code. If NFIP is to provide flood insurance to homeowners, then their communities must adopt the NFIP building code.
So far, this makes eminent sense.
In a study examining the effect of hurricanes on barrier island property in Lee County, Florida, Carolyn Dehring and Martin Halek, found that houses built according to FEMA minimum building standards suffer more property damage during hurricanes than homes built prior to the issuance of those regulations. Some facts:
- Since 1978, NFIP has paid out $3.7B in losses in Florida alone.
- In 1984, Lee County (FL) joined NFIP, at which point new buildings became subject to the FEMA regulations.
- In 2004, Hurricane Charley made landfall in Lee County.
Dehring and Halek examined 264 residential properties--specifically at "A-Zones" (areas subject to rising flood waters)--233 of which incurred damage as a result of Hurricane Charley. Buildings in the A-Zone constructed after the NFIP building code was implemented incurred 57% more damages than similarly situated property.
Why was damage in the A-Zone worse? Of those properties, 63 reduced the minimum required elevation of between 1 and 4 feet per FEMA guidelines. Decreasing elevation by 1 foot increased property damage by 1.267%.
Difficult to believe, isn't it? The federal government sets minimum standards to ensure less damage and, hence, decreasing payouts from federal coffers to the insured. But, those standards end up increasing payouts to the insured.
And taxpayers wonder why the federal deficit is increasing? They might first consider asking those "Wizards of Smart" at FEMA who came up with the regulations.
Let the discussion begin...
To read the study, click on the following link:
"Do Coastal Building Codes Make Stronger Houses?"