by Patrick Appel
Suzy Khimm wonders why the government provides flood insurance, at a loss, for flood-prone houses:
Private insurers rarely cover offer flood protection, believing that the risk is far too high in most cases. Instead, the National Flood Insurance Program — created in 1968 and currently run by FEMA — covers about 5.5 million homes across the country, insuring flood-prone communities that take steps to manage their floodplains. Even when private insurers are contracted, “the profits from such flood insurance are private, but the losses are socialized as private insurance companies bear none of the underwriting risk associated with this insurance,” as economist Don Taylor explains. Either way, taxpayers are ultimately on the hook when these flood-prone homes go under water.
Yglesias asks why these types of programs remain so popular.
The Dish 