From Bloomberg:

Severe repetitive loss properties account for just two percent of all flood insurance policies, but as much as one-third of all claims, according to R.J. Lehmann, director of insurance policy for the R Street Institute, a Washington think tank.

The result is that the program relies ever more heavily on taxpayers. Last year, the Congressional Budget Office calculated that annual costs exceed premiums by about one-third — and that was before Hurricanes Harvey, Irma and Maria. In October, Congress forgave $16 billion in debt that the program owed the U.S. Treasury.

“The NFIP was not designed to retain funding to cover claims for truly extreme events,” the Congressional Research Service wrote in a report released this year.

Belhaven demonstrates that trend as well as any place. For all the money the federal government has spent in the aftermath of previous flooding there, it has spent very little on reducing the threat from the next flood. Just one-third of the town’s severe repetitive loss properties have gotten money for what the government calls “mitigation” — a category that includes flood-proofing or raising the home on stilts.

The most effective type of mitigation is tearing down the house, and paying its owner to move elsewhere. But that step is also the most rare. The NRDC’s data show that of the 120 homes, none have been torn down through a buyout program.

Credle, the Belhaven mayor, said moving some residents to safer locations should be considered as part of the response to Florence. He said it didn’t matter if that meant his town shrinks, along with its property tax revenue.

“You always want the tax base to be good,” Credle said. “But you also want people to be safe.”

Other examples abound in the wake of Florence.

Washington, a North Carolina town at the mouth of the Pamlico River that was also flooded by Florence, has 114 severe repetitive loss properties. Together, those 114 homes have received $12.6 million in federal insurance payments since 1978. Yet at most 28 of those homes have received federal money to reduce their flood exposure, and only one has been torn down. One of those homes, with a total value of $102,000, has gotten federal flood insurance payments 11 times.

In New Bern, a town 45 minutes south of Washington, 29 severe repetitive loss homes have received $2.7 million in federal flood insurance payments. The federal government has acted to protect just six against flood damage. None of those homes have been bought out and demolished.

As climate change gets worse, federal policies have effectively reduced the cost of living in flood-prone areas, increasing the number of homes that continue to flood at taxpayer expense.

By subsidizing flood insurance by allowing an unlimited number of claims, the insurance program serves to increase other types of federal disaster costs, Lehmann said. “If people weren’t living there, then there would be less disaster assistance necessary,” he said.

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