Rebuild after Harvey? Sure – but not on our dime!

I’m getting frustrated (again) at claims by those who’ve been washed out of house and home by Hurricane Harvey that they’re going to rebuildin the same place.  The same thing was said (and done) after Hurricane Katrina in 2005, and Hurricane Gustav in 2008, both of which I experienced.

Have we learned nothing from such natural disasters?

The one thing we should not be encouraging is to allow people to rebuild right smack bang in the middle of the devastated area, where the next hurricane that comes along will do the same thing to them, all over again!

I’d like to see a threefold approach to this mess.

  1. If you want to rebuild in the same storm-affected area, you can do so;  but once you do, you’re on your own.  There will be no storm- or flood-related insurance offered on your property, and FEMA and other government agencies will offer no compensation whatsoever if and when it’s damaged or destroyed again by strong weather.
  2. Existing government-subsidized insurance programs (e.g. the National Flood Insurance Program, which is already more than $24 billion in the red) should be modified.  Obviously, one can’t suddenly cancel the insurance of existing policyholders;  but there’s no reason why the policies can’t be modified.  In the event of a claim, it should be a condition of payout that the insured use the money to rebuild elsewhere, in a safe location that is not within a flood danger zone.  If they insist on rebuilding where they were, then their flood insurance will be summarily canceled after the payout, and their property will never again be eligible for any subsidized insurance policies.  (Also, see point 1 above.)
  3. Insurance companies should be prohibited from using the premiums paid by policyholders in ‘safe’ areas to subsidize the premiums of those in ‘unsafe’ areas.  If you choose to live in a hurricane or flood danger zone, or near an active geological fault that can produce earthquakes, or close to an active volcano, you will have to pay a premium that accurately reflects the risk to the insurer.  Those living in safer areas should not have their premiums ‘aggregated’ with those in more dangerous areas, so that the former are effectively subsidizing the latter.  If it’s too expensive to get insurance in one area, you’ll just have to carry that risk yourself – or move to a safer area.  (Perhaps one-off, partial subsidies might be offered to encourage the latter.)

I suspect that, if those measures were put in place, we’d see a whole lot less people insisting on rebuilding in an area that’s bound to be hit again by another such storm, sooner or later . . . costing all of us money.



  1. Decades ago, beachfront property was cheap and the houses were small because you didn't want to sink money into something so vulnerable, and if you could get insurance you couldn't get much because of the danger.
    It is quite telling that insurance for the places hardest hit recently is only 'reasonable' because if state or federal programs – it shows that the free market thinks living there is an unacceptable risk!

  2. Don't you now live in a natural disaster zone, specifically tornados?
    Where are people supposed to live? East coast and gulf coast is out -hurricanes. Middle area of the country is out- tornados and possible earthquakes-see New Madrid fault line. West coast no good, earthquakes and volcanoes, Hawaii is an active volcano region, Alaska – same problems.

  3. I am afraid your going to catch a lot of grief over this but I have thought the same thing for a long time. Yes we live in a Tornado zone but the chance of actually being in the path of one is remote. They are not very wide. The chance of damage in a hurricane area is far more likely due to the immense size of the things. It is possible to build hurricane resistant homes but requires a different architecture than the one currently preferred by the people who live there. Technology can solve many problems if only it is used.

  4. Flooding seems to be the most common loss claim. Require anyone building/rebuilding on a previous flood site to build above the highest flood line recorded. Also require parking spaces to be above this level. Make it not only an insurance issue, but zoning regulation.

    Require this construction to handle water flow that would be found in the typical flood for that area.

    Frankly, the lead on this has to be done by the insurance industry, as there is too much money involved to bother with politicians, although the .gov has to be removed from flood insurance coverage.

    When you see people rebuilding multiple times in the same spot, with no regard for water levels, there is .gov money involved. That has to stop.

  5. Some of these towns and cities are well over a hundred years old, if not nearly 200 years old.
    And a number of them have been rebuild in the past as well.
    Even sizable cities like Galveston had to be rebuilt a couple times during this country's history.

    Once a certain area has been established and designated as a major town/city it pretty much remains in the same spot for generations, in spite of environment/terrain. Think "Los Angeles" or "Oklahoma City".

    Overall population is another factor. You wouldn't (for example) want remote areas in Montana or the Canadian Northwest Territories getting flooded with development projects would you?

  6. The constitution doesn't give the Federal Gov the authority to sell flood insurance. End the program. If someone wants to pay obscene premiums for private flood insurance, that is their business. The gov shouldn't subsidize people living in flood prone areas.

  7. Earthquakes are an interesting case. Around here, standard homeowner's insurance doesn't cover them. An earthquake rider is available, but at a prohibitive cost, so I assume hardly anyone actually has earthquake coverage.
    My guess (and, probably, everyone's unspoken assumption) is that when a big earthquake comes along and does enough damage to some houses to exceed the (very high) deductible for those who do have coverage, there'll be enough uninsured families suddenly homeless to get into "too big to fail" territory, leading to a massive federal bailout.

  8. IF we'd get rid of Federally subsidized flood insurance all the issues would go away.

    You left out wildfires as another danger that we not in a danger zone should not have to subsidize.

  9. Peter,

    The fed. flood insurance serves mainly to allow folks to get a mortgage. The actual payouts are rarely enough to let someone rebuild.

    What about this: You join the program, and pay your premiums. But you accrue coverage at 5% per year. The insurance is not transferable, so you sell your house, the new owner starts out with 5% coverage.

    This would provide coverage for long term residents, but would also greatly reduced the number of people who can afford to move into low lying areas.

    It would also mean you are paying cash for the property, or a very high down payments (50% or more). That of course would be up to the mortgage companies, but without insurance they would have to be much more careful.

    It would, I think, transfer financial risk from flood damage largely to the individual. With the risk transferred, the Flood Insurance program could become a self funding non profit arrangement.

  10. Ok, sounds like a plan. But before we touch one dime going to help Americans we need to cut every penny going overseas for any reason. Bring all our troops home. Keep American tax dollars in America. If we can't help American flood victims then we should not be defending Poland, South Korea, Japan, Iraq, or Israel.

    If you want to help starving Africans, fine. Send your own money, not one penny of American tax money.

    Then we can talk about cutting Americans off.

  11. They did a lot of relocating and buyouts in the Midwest after the flood of 1993. You either moved or you built your house above the flood level. The Fed's were hard asses about it too. Didn't matter that they hadn't flooded in the previous 80 or 100 years, after 93 you had to go. It's easier to do that to working class white Midwesterners though. They wouldn't think of doing the same thing to more diverse areas where they actually live under normal river levels, are protected by shoddy levees and have issues pumping out the water from normal summer thunderstorms.

    As for tornadoes, we live in an area where tornadoes are quite frequent. In the past 10 years we've had tornadoes or funnel clouds in sight of the house probably 7 times. We get tornado warnings, not watches, from the NWS 2 or 3 times a year on average. Despite all that, we haven't actually been hit by one in the 180+ years my family has lived on this farm. Just goes to show how truly rare it is to be hit by one even in most of "tornado alley".

  12. The problem here is that many places now underwater weren't in the conventional flood zones. People who haven't see hide nor hair of a flood in 40 years are underwater.

    So where do you make the cut off? Sure, those in the predicted routine inundation zones, the people with flood insurance, maybe, but others who've been high and dry for half a century and were outside the flood zone map areas, and by the way, probably don't have flood insurance so are on their own anyway?

    Katrina was not just a storm, but a storm whose landfall was at a very magnifying location, the Pearl River. This location plugged the storm surge drain to the left of the storm. This caused cat 5 level predicted inundation.

    Harvey strengthened, but the major cause of the flooding is the unique blocking ridges (highs) over the Western US and the Eastern Gulf. They stalled the storm so that the rain accumulated in on place, with part of the pump still over the Gulf to pull up moisture.

    Wednesday, Harvey is going to head for Ohio, weakening, but bringing along a lot of rain, not the amounts we've seen, but still amounts to cause regular flooding well into the east central US.

  13. Brian (above) maks the point: There's general area in the U.S. that cannot experience a "natural disaster."

    Humans are tool users, and have creative intelligence; that means we are supposed to be able to use intelligence, experience and learning to deal with stuff. Of course, "dealing with stuff" in the form of designing and building structures to resist natural disasters involves that dastardly villan "money."

    Hurricane Andrew in 1992 led to substantial changes in Florida's building codes. My house – built under the old bulding codes – survived 110 MPH winds in Hurricane Charley just fine. Newer house, built under the new code, should do better in even higher winds.

    Hurricane Sandy (usually called "Superstorm Sandy" to avoid the insurance payout restrictions of calling it a hurricane) caused widespread flood destruction on the New Jersey coast, leading to building code changes there – specifically, elevating houses above the level associated with predictable flood damage, about 6-8 feet.

    All these codes changes cost money for compliance, raising the cost of structures, which invokes the age old rule of "pay me now or pay me later, but you will pay at some point." Build it to avoid flooding / wind/ earthquake / etc. which costs more or pay that additional cost – and potentially much more – in rebuilding expense or loss not covered by insurance.

    I'll agree that federal subsidies of flood insurance should be terminated; if flood insurance is needed or desired it should be at competitive, open market prices from insurance companies without the federal government's thumb on the scale. If it is unaffordable to you, in a location where you want to build, either don't build or go without it, with full understanding that you're "going naked" regarding flood insurance coverage. Then it's up to the local government to require "demolition salvage bonds" be purchased to cover the cost of demolishing flood-damaged (or wind-ddamaged) structures that owners cannot, or will not, rebuild.

  14. My first sentence: Brian (above) maks the point: There's general area in the U.S. that cannot experience a "natural disaster."

    Shoudl read: Brian (above) makes the point: There's no general area in the U.S. that cannot experience a "natural disaster."

    Peter, have you considered incorporating the capability for a brief edit window for comments?

  15. cities are where they are due to geography (most of the time here rivers and natural roads intersect)

    a storm doesn't change this geography.

    You can't have a port that's not vulnerable to ocean storms.

    As others have stated, there's no place that you can build that's not subject to some natural disaster.

    real insurance is a bet of purchasers vs the insurance companies, the purchasers bet that there will be a problem, the companies bet that there won't. Regulators try to make sure that the companies save enough to pay off if they loose.

    It's all a matter of Risk Management. If the advantage of being in a given location is worth the cost of rebuilding after a disaster, then people should remain in place.

    Sometimes it's worth making changes when you rebuild (after Sandy, many of the rebuilt houses were put on stilts), but sometimes the disaster is rare enough and severe enough that it's not worth the cost to defend against that specific disaster because it's so rare.

  16. There are precautions that can, and should, be taken to mitigate damage. But anything humans can do, mother nature will eventually overwhelm. Getting the Feds out of the 'insurance' business and letting the private sector set rates applicable to the risk involved would be a step in the right direction though. Getting people to move, even just a few thousand, is difficult. Getting several million to move is next to impossible.

  17. @Bob

    now factor in earthquakes, tornadoes, volcanoes, snow damage, and other disasters.

    Then take into account that many parts of Houston were outside of the expected flood areas, so they would be green on these maps (if you were to zoom in enough)…

  18. @David

    Exactly my point. I understand the thinking behind Peter's idea (I grew up along the Ohio River), but it's just not feasible.

    In a way, it's similar to the anti-gunners' reactions to a mass shooting. They want to react and prevent the event from ever happening again (and who wouldn't), but you can't make public policy in the heat of the moment. You end up with something like the PATRIOT ACT or worse.

  19. Yeah. Areas are flooding to 17 ft. that are not usually flooded at all. This is not a 500 yr flood, this is a WTF-we haven't seen this since Noah kind of flood.

  20. Slap enough tarmac on top of a relatively flat area without sufficient drainage for exceptional storms and watch the water stay where it lands …

    Not really a huge surprise.

  21. I live on the side of a hill, but had to pick up flood insurance for a few years after a severe fire denuded the hill above me and made my whole area a flash flood risk. I never actually had an issue with it, but I am far away from any flood plain or major drainage channel – you can't really predict where these things can occur with certainty.

    That said, I fully agree that the government should be out of the insurance business and such things should be handled through the free market.

  22. @crackpot, you can't blame the paving here.

    how many places do you know that can handle 60" of rain over a few days?

  23. Yeah, I'm over 60 miles inland and my neighbors are flood damaged. It may be an appealing idea on some level, but on another it's completely asinine. Something like 90% of the population lives within that distance from a coast susceptible to storms. Many places don't get them often, and we've never, repeat never, gotten one like this.

    Besides which, many of the things mentioned do get/did get/are implemented in the codes and rules for rebuilding. Lots of areas in Houston got re-zoned as higher risk just a few years ago and all new construction needed to be much higher above ground level. We are in a hurricane zone and new construction has to be resistant.

    In other words, people may be tired of paying for it, but I bet you all like the stuff that the coastal regions produce and enable, you know, like cheap imports from containerized ocean shipping, fruit out of season, cars, refined gasoline, plastic, fertilizer, energy, corn, wheat, fruit, beef, etc. Houston is the 4th largest city in America, with the 4th busiest port, has MOST of the oil refineries and the plastics and other chemicals that come with that, and TX is a net exporter of electricity, food, oil, and gas. You only get that in areas with people in them. People need somewhere to live. Ergo, we will continue to live and work and build on the coasts, despite the risks, and since everyone benefits from the risks we take, I don't have a problem with everyone pitching in on that risk. It's not like Miami, which produces nothing…

    Besides which, we've already taken great steps to mitigate the effects of normal storms and even normal sized hurricanes, that's what the bayou system, the dams, the channels, and streets are designed for. We already build to a more demanding and expensive hurricane standard.

    This is a bit disjointed, as I haven't been sleeping all that well the last few days, given the ongoing disaster in my community. I hope readers will make allowances.

    And if the spirit moves you, there are a lot of folks here who are going to need extra-ordinary help.


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