Ignorance is Bliss – As it Ruins Middle America

Conservative thinkers fail to comprehend the pain middle-class
homeowners are facing over increasing flood insurance rates.

By Mark E. Ruquet

If anyone thought that rolling back the astronomical flood insurance premium increases middle-class homeowners are suffering under Biggert-Waters would be an easy task—think again. Common sense should rule the day, but a look at two influential conservative publications should have many middle-class homeowners worried.

Recently, the Wall Street Journal published an editorial saying flood insurance increases should not be delayed. The author reasons that the only homeowners demanding this change are millionaires with beachfront properties seeking cheap insurance.   The Times-Picayune, which reported on the editorial, called it “a setback” for supporters of the rollback because of the papers influence with Republican legislators.

Another publication, The American Press, notes that R Street, an influential non-profit conservative think tank, published its own thought piece objecting to plans to delay increases. Like the Wall Street Journal, they say only a few homeowners are affected by rate increases—they say 90 percent are unaffected—and the only real losers are the members of the “1 percent club.”

R Street pointedly criticizes Rep. Michael Grimm (R-New York) for proposing a four-year moratorium on rate increases. They imply that the Congressman is working to subsidize the wealthy. Obviously, the writers of this piece have no idea who the Congressman represents otherwise they would be printing retractions.

Both publications point out the $25 billion deficit the Flood insurance program is in and worry about taxpayers footing the bill. They go back to their neo-conservative positions that no government program is a good program, and only the private market model can solve the ills society faces today.

People in the worst hit communities of New York and New Jersey who suffered through Superstorm Sandy, and those in Louisiana still recovering from Hurricane Katrina, know full well two blaring realities these publication ignore: most of us don’t have million dollar homes and we continue to struggle to put our lives back together after these disasters. I personally can testify to the fact that the modest rate increases these publications speak of are not modest in the least. We saw a renewal increase of 151 percent, and there was nothing cheap about what we were paying initially. On top of that, we’re to get 25 percent increases for the next several years under the current law. Guess what? The rich are not paying for the $25 billion flood insurance deficit. It’s the middle-class.

The writers of these editorials need to get out into the real world and understand the plight of the majority of Americans. The rich can afford to pay more. Real middle-class Americans, continually under pressure to make ends meet, do not have ready access to liquid commodities to afford these increases.

Both the Wall Street Journal and R Street editorials also fail to come to grips with who is calling for these changes. Flood insurance coverage is limited to $250,000 property. That’s only a quarter of the coverage needed to replace a million dollar home. What does that mean? Those in the high-end income bracket are purchasing excess insurance coverage for the value of their high-value homes. An individual who can afford to go out and buy excess coverage is not going to be overly concerned when their primary coverage increasing by a few thousand-dollars. They have the money.

The people crying for change and hurting from these flood insurance increases are those who can afford it least and live in homes that are not luxury villas. Ignorance is a beautiful thing when individuals want to disregard the realities of the pain shortsighted planning causes average Americans.