A Message From PIA's President
As a proud native of the great state of Louisiana, I am no stranger to hurricanes and tropical storms. My wife Charmaine is still haunted by memories of Hurricane Betsy in 1965. She was 12 at the time and living in a house in the Ninth Ward of New Orleans when Betsy hit. Flash ahead 40 years and our lives were turned upside down by Hurricane Katrina. There were many more hurricanes in between.
People sometimes ask me why I’m so adamant about selling flood insurance. If you’ve ever been through a Katrina or a Betsy and been lucky enough to live to tell about it, then you know why. I’ve always felt a sense of responsibility to tell my neighbors who haven’t been through it about the danger and the need to protect themselves from floods.
The thinking that we have to counter is “it can’t happen to me.” Take it from me, it can, it does and it did. People in “low-risk” areas of the country have discovered they can lose their homes to flood, too. Low-risk does not mean no risk. Everyone is in a flood zone.
Recently, there has been some controversy involving flood insurance. Allegations have been made that there were improper adjusting practices involving some properties flooded during Superstorm Sandy. We are confident investigations will determine whether there was wrongdoing, and if so, appropriate reforms will be undertaken.
Unfortunately, some politicians aren’t waiting for the facts. They have suggested that the Federal Government should take over the entire National Flood Insurance Program (NFIP) and provide direct delivery of all flood policies. PIA opposes this. The Federal Emergency Management Agency (FEMA) and policymakers should think very carefully before acting precipitously to abandon the public-private partnership with Write-Your-Own insurers, which has worked well for more than 30 years.
Changing to direct government delivery of flood insurance would require additional and significant federal capital investment to greatly expand the size of the FEMA/NFIP staff in order to do so. The NFIP went down this same road from 1978 to 1983 and it was a disaster for policyholders and communities, leading to escalating costs and lack of growth for the program. Doing this would create an Affordable Care Act (ACA) approach and put it on steroids by banishing the private sector. At least with the ACA private sector carriers are involved.
After all these years, we count conversations that convince my customers to get a flood policy as “wins” and those that do not as “losses.” We still win some and lose some—and it is required that every customer who turns us down signs a form that shows the coverage was offered (which protects me from E&O issues).
Of course, the real satisfaction is when my customers say yes, they want flood insurance. Those words are music to my ears.
Richard A. Clements