2013-10-18 / Editorial/Opinion

A Precedent Might Show The Way

Assemblyman Phil Goldfeder happened upon an interesting, and potentially game-changing idea that is worth pursuing in a full throttle way.

In the turbulent 1960s there were widespread and frequent riots in the inner cities. Firefighters had their hands full. As whole neighborhoods declined, arson was big business. After years of this, legitimate owners of properties had trouble purchasing fire insurance.

And so the New York Property Insurance Underwriting Association was born in October, 1968. Insurance reps met with New York and Washington officials and figured out a way to insure these properties. If the private sector couldn’t provide insurance the state would assist.

It was fire in the 1960s. It’s flooding now.

Something similar to the New York solution was tried when so many private insurers bailed out of coastal areas. The National Flood Insurance Program filled the void. But the NFIP is mismanaged and inflexible. A New York or even regional association including New Jersey and Connecticut could customize flood insurance to fit homeowners in the area. A state run or multi-state run program could be designed to address all the flaws in the current system.

For starters, higher deductibles could be put in place, something the feds won’t do. Another fix, if a homeowner makes multiple claims he should pay more, of course. But the fed system allows multiple claims and no increase in premiums.

And here’s another gaping flaw in the current system. Banks insist homeowners carry flood insurance BUT the maximum amount of flood insurance you can get is $250,000. Houses in New York cost two and three and four times that amount. Banks are insisting on coverage that won’t even protect their mortgage. $250,000 wouldn’t even cover the land in many places in New York. The fed system might work in Mississippi but not here.

New York doesn’t have the same flood issues as other places; we shouldn’t have the same flood insurance.

Goldfeder is on to something here. He’ll have allies in the assembly and senate. He’ll have allies in other states if that’s required.

Joe Addabbo and James Sanders should start working on the senate side. Maybe someone will locate Michelle Titus and get her to do something in the assembly.

But perhaps the one guy who needs to tune in is Governor Cuomo. He might get some national attention if he gets behind this and helps carve a solution.

After New York fixed its fire insurance program 29 other states followed suit. Cuomo must know that all 50 states have A Zones and therefore, flood insurance problems. He could be the guy that helps us get out of the Biggert-Waters Act. Other states will notice and thank him.

So, Cuomo might realize he can help his state – and himself.

The fire insurance program of the 1960s is a precedent. It should be followed.

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