Heavy Weather: How Climate Destruction Harms Middle - Center for ...

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Heavy Weather: How Climate Destruction Harms Middle - Center for ...

To avoid this, insurance models should be required to use the latest available datafor risk-analysis projections. Ceres also argues that “the insurance industry itselfshould be aggressively lobbying for updated building codes, better federal [adaptation]policies, and reducing carbon emissions.” Failure to do so will result in majorlosses for homeowners, taxpayers, and the insurance companies themselves. 177Flood insurance reformsIn July 2012 Congress passed and President Barack Obama signed the “Biggert-Waters Flood Insurance Reform Act of 2012” as part of Public Law 112-141. 178It reauthorizes the National Flood Insurance Program that provides coverage forcommunities that participate in the program and agree to adopt local floodplainmanagement ordinances. The new law would discourage new development infloodplains and improve the program’s fiscal soundness by removing subsidizedinsurance rates for secondary residences and businesses. 179The new law also allows insurance rates to increase by up to 20 percent per year forall policies and by 25 percent per year on certain categories of policies until actuarialrates are achieved. 180 The new law also removes subsidies for properties thatincur flood-related damages higher than their market value and for properties withrepetitive losses. For the first time, the act authorizes an ongoing National FloodMapping Program and stipulates that it include mapping future flood conditions,projected effects of future development, and anticipated effects of sea level rise.The reforms will eliminate subsidies that were useful earlier in the life the 44-yearoldprogram but now interfere with people’s accurate assessment of flood risk conveyedby actuarially sound rates and diminish the fiscal soundness of the NationalFlood Insurance Program. The reforms also streamline the numerous flood-mitigationprograms funded by policy holders to improve the programs’ effectivenessand efficiency in reducing unnecessary drain on the National Flood InsuranceFund. 181 Flood-hazard mitigation is a sound investment in reducing flood disastercosts. Studies found that for every $1 spent on flood mitigation, $5 is saved. 182Hurricane Sandy will likely rank as the nation’s second most expensive hurricaneever based on damages paid out by the flood insurance program. Yet The New YorkTimes reported “it will be many years, if ever, before many homeowners are requiredto pay premiums that accurately reflect the market cost of the coverage.” 18331 Center for American Progress | Heavy Weather: How Climate Destruction Harms Middle- and Lower-Income Americans

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