Thursday, April 17, 2014

No place like... in a flood zone?

      There are currently 98+ homes being planned in Britain, some valued at one million dollars.  The only odd thing about these homes is that they are being planned in high-risk flood areas. 21% of all new London homes were built in high-risk areas as well.  The government is subsidizing these buildings through surcharge fees from current homeowners with flood insurance.  These low-risk homes are paying additional money so homes can be built in high-risk areas.  This pooling of flood risks is a key factor in why the National Flooding Insurance Program is in a $24 billion debt.  It is estimated that one in ten homes receive an insurance pay out that is worth more than their home is.  This higher insurance premium being pushed to those who are in low-risk areas may cause the low-risk homeowners to leave their current insurance. If they leave, low-risk homeowners will cause less subsidizing for these new homes in high-risk flood areas, which will not help the NFIP get out of their debt.
I do not see the point in building homes in a high risk area other than an insurance scheme.  Who are planning these homes?  From these articles, it seems to me that they are being privately planned and these private planners are playing a gambling game.  If there house is flooded they will cash out on their insurance pay out and until that flooding does occur they are living life in a decent home.  I believe policies should be implemented to restrict construction on known flood areas.  The land should be protected and not used as a residential area.
--Devon Le

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