Hurricane Florence brought historic flooding to the Carolinas. Many parts are still underwater. After each catastrophic flood, we seem to revisit the same questions about repair, recovery.. and who bears the costs. Right now, federal taxpayers cover the cost of the government’s national flood insurance program. But it’s on borrowed money...and time. Lisa Fletcher has been looking into why.
Ellicott City, Maryland, a small town that traces its roots to the 17th century. Now, best known for flooding, repeatedly. Floods with odds of 1 in 1,000 years, happened twice in just two years. A stretch of Main Street, swept clean of cars by flood waters that poured into buildings.
Linda Jones: I look out, the water is raging, it's raging. I turned around and I said, everyone upstairs now.
Linda Jones runs a tea room and gift shop. She had just rebuilt from the 2016 flood - when the flood of 2018 happened. The long path to recovery is complicated. Flood insurance is exclusively funded by the National Flood Insurance Program - run by FEMA.
Lisa: When you bought the tea room, did you buy flood insurance?
Linda Jones: I did not. My insurance agent and I never discussed flood insurance I just took over the process just like the people before me. But they did say to me it’s too expensive. So I’m like, okay, we can’t afford that, we’ll just see what happens.
Steve Ellis: There are a lot of people who don't have flood insurance who really should. they think it's covered in their own homeowner's insurance policy, but homeowners insurance does not include flood insurance.
Steve Ellis is with Taxpayers for Common Sense.
Lisa: You recently called the National Flood Insurance Program dysfunctional. Why?
Steve Ellis: the program is basically takes in about 3,000,000,000 dollars in premium revenue every year and it's tens of billions of dollars in debt. So, it's a severely underwater program that is not serving, not protecting taxpayers, is not protecting people.
It was introduced in 1968, but even years earlier, a government task force warned that if not managed correctly, the program could become a breeding ground for waste. 50 years later, its 20 billion dollars in debt. Part of the problem, Ellis says - homes and businesses in high risk areas using subsidies to rebuild - time and time again. A single home in Texas- has had 22 flood insurance claims, costing 2 and a half million dollars since 1979. That's at least 8 times what the house is worth.
Linda Jones: Having insurance in a place like Ellicott city where we always flood, you know, and have for years, you have to, you have to reevaluate that. This is ridiculous.
Lisa: Are we encouraging risky behavior?
Steve Ellis: I’m not saying everybody in the flood insurance program is a millionaire with a beach house, but there are millionaires with beach houses in the program that are getting subsidized premiums that is costing other taxpayers. We’ve made it safer at least financially to build and develop in harm’s way.
Jones now has flood insurance, but she's refusing another risky rebuild, after seeing the damage to her community.
Linda Jones: We lost 247 cars the first flood, and 197 the second flood. What does that tell you? Hello? You can’t keep doing this. And we lost 4 people. 4 people have died as a result of this.
Lisa: Is it too much to say, you would feel irresponsible building here again?
Linda Jones: It is not too much.
Last November, Congress passed a bill to reform the National Flood Insurance Program. It would re-evaluate risk, aim to get more people insured, and let private insurers get in on the game.
Steve Ellis: if it was Flo from Progressive selling flood insurance rather than some exotic product from the federal government, there'll be a lot more people getting policies. when you develop the private market, there's going to be more Americans buying flood insurance.
A recent study found that between 70 and 90 percent of policy-holders in Florida, Texas and Louisiana could find cheaper coverage if the private sector got involved. But the house's plan for reform stalled- as the Senate failed to act.
Steve Ellis: Something has to happen to sort of shock the political system. We can't keep doing business as usual.
Opinion in Ellicott City is Divided on whether to rebuild or relocate. Jones hopes to reopen her building - on safer ground.
Linda Jones: My greatest joy would be for them to pick up this building from 1833 and move it to higher ground.
This summer, the House okayed a short-term extension of the program - as is - so it gets us through this hurricane season. At the end of November, we’ll do it all again...as lawmakers face the choice to reform, re-new, or let the program lapse.