One year ago this coming Sunday, the article cited below was the cover story for the 9/2/17 issue of The Economist. The points raised by this article (regarding the “moral hazard” associated with mispriced/subsidized insurance coupled with misguided NFIP claims policies) are (unfortunately) as valid today as they were back then.
Quoting from this article,
“Underpricing (of flood insurance) encourages the building of new houses and discourages existing owners from renovating or moving out. According to the Federal Emergency Management Agency, houses that repeatedly flood account for 1% of NFIP’s properties but 25-30% of its claims. Five states, Texas among them, have more than 10,000 such households and, nationwide, their number has been going up by around 5,000 each year. Insurance is meant to provide a signal about risk; in this case, it stifles it.”