Federal flood insurance is snow job

The start of the new hurricane season is upon us.

Does anyone feel safer?

We in Montana don't have to worry about hurricanes, of course, but if you live on the Gulf Coast you do. And you probably don't feel any safer than last year when Katrina devastated New Orleans and much of the Mississippi and Alabama coasts.

As a matter of fact, you probably feel less safe - because you now have fresh in your mind just how dangerous hurricanes can be.

But that won't stop thousands of people from ignoring hurricane warnings and hunkering down when the next big storm huffs and it puffs and it blows their house down (wood, brick or straw won't necessarily matter).

And it won't stop thousands of people from rebuilding their houses on vulnerable beachfronts and smack dab in the middle of the floodplain even though they know it is dangerous and foolish to do so.

A Tulane University professor put the danger graphically in a news story this week. He said that beachfront property on the Gulf Coast "is not just flood prone. It is atomic bomb-like wipeout prone."

Nonetheless, the federal government - through the National Flood Insurance Program - is paying to rebuild in the wake of Katrina, and then when these structures are put back up in areas of maximum danger, they will be insured again so that the next time a Level 4 or 5 Hurricane hits the Gulf Coast these poor unfortunates will be able to rebuild once again.

Wait a minute! Just who are the poor unfortunates? The people who get to enjoy beachfront scenery while the taxpayers absorb all the risk? Or the taxpayers who are shouldering the burden?

There is a simple reason why the National Flood Insurance Program exists - because private insurers know that they can't absorb the cost of rebuilding hurricane-destroyed cities without charging rates that will be unaffordable for most consumers.

But since consumers want to enjoy the luxury of their beachfront lifestyle, the government has stepped in and subsidizes the cost of insurance to make it affordable. This unfortunately allows homeowners and others to build in areas where it is not prudent to do so. If the house falls down, you pick up the insurance payment and build again.

According to one study, repeat claims account for 40 percent of all payments from the National Flood Insurance Program, even though they represent only 2 percent of the properties covered by the insurance.

And we are not talking about small potatoes either. In fact, the federal program insures $763 billion worth of real estate.

Maybe that makes sense for existing property, as a way to prevent calamitous loss, but Congress needs to stop the revolving door. Future payments for flood losses in dangerous areas should be predicated on the understanding that homeowners who rebuild in the same location will have to find private insurance or assume their own risk.

The taxpayers can't do everything for everyone for ever.