Opinion

Discourage risk

Opinion of, Florida Today
Published: November 21, 2012

After disasters such as Superstorm Sandy, the natural inclination is to do everything possible to help people struggling to rebuild their homes, businesses and lives. But during the next couple of years, those good intentions will lead to a lot of foolish, even dangerous, decisions that will encourage people to rebuild in harm's way. That's why any recovery plan has to involve rebuilding smarter in some places and not rebuilding in others.

A huge federal apparatus and powerful special interests are intent on doing just the opposite. The best illustration of this misguided policy is the National Flood Insurance Program, created in 1968 to provide insurance to homeowners on coasts and near rivers who had trouble getting private coverage.

The creators meant well, but here's the flaw: The program's premiums don't reflect the actual risks, especially in an era of rising sea levels and extreme weather. As a result, federal insurance has encouraged developers to overbuild in risky areas, and residents to rebuild even after repeated flooding.

Supporters of the insurance program, such as builders of beach homes and the real estate agents who sell them, point to insurance reforms passed this summer, which allow faster premium increases for vacation homeowners and repeat claimants. But Sandy showed bigger changes are needed.

Step one is to carefully decide what should, and shouldn't, be rebuilt. Encourage residents to leave the most vulnerable places. In the areas that are rebuilt, require homes to be raised on pilings, and restore dunes and other natural buffers.

Longer term, eliminate taxpayer subsidies of the insurance market. Premiums would surely rise, reflecting the true risk of living so close to the water. And that's the whole point.