If this doesn’t anger you, nothing will. Have you ever thought about why your flood insurance premiums are so low while your windstorm premiums are so high? The answer is really very simple. The entire country shares the burden of the National Flood Insurance Program. It is a National Program where the insured risk is spread throughout the entire country. Nobody pays extra because they are in a state that is more prone to get hit with a flood. It’s a one for all, all for one program.
To the contrary, insurance protection against windstorm events like a hurricane are not covered by a national program like flood insurance is. Floridians pay exorbitant amounts for private windstorm insurance because there is no national insurance program that covers the risk of hurricanes.
Most of the natural disasters in Florida are the result of wind driven damage and not flood damage. Notwithstanding this, Floridians contribute a whopping 35% of all the premiums collected for the National Flood Insurance Program. In return, Floridians only receive about one-quarter of what they pay into the program.
Let’s look at this in even easier to understand terms. The victims of Hurricane Harvey primarily suffered damage as a result of flooding, not wind storm damage. If these victims had flood insurance, it was cheap, and they will receive pay-outs from the national flood insurance program in place. Floridians will wind up paying 35% of all pay-outs to the victims of Hurricane Harvey and the other states pick up the other 65%. Now let’s look at the victims of Hurricane Irma in Florida. Most of the damage here was wind driven. Floridians get zero help from a national program and instead hope that their private insurance carrier does the right thing and pay their claims, even though they paid their insurer incredible amounts of money for annual windstorm premiums. Floridians pay for the damage in Texas, but only Floridians pay for the damage to Florida and we get back zero from the other states. How is this remotely fair to Floridians?
It’s time Floridians stop getting taken advantage of. Our windstorm premiums are out of control, and trust me, it’s going to get much worse as a result of Irma and Harvey next year. It’s time to contact your elected federal officials and demand that Congress pass legislation that creates not just a national flood insurance policy, but a policy that covers damage as a result of wind, and specifically hurricanes. It’s only fair.