I am not anti government, but ever since the US government basically took over the flood insurance program, the rules and common sense did go south. We used to buy it from a local agent, and still do, but she must follow the federal guidelines now and we dropped our original insurance company because they refused to jump through the hoops. We contacted several agents to get our best deal, and laughed at some of the comments made back to us as to why we could not get a (federal)policy from them. The worst one? We live on a hill above the lake, protected by huge boulders (rip rap) and are a full 12 feet above the lake, but right next to the lake (within ten feet). For that reason we were turned down. If we lived one foot above the lake level, but 100 yards away, we would have been insured.... Think about it.... Elvis has left the building and taken common sense with him.

Further, the premium we pay is less that it was and you may consider that a good thing. However, if you look at the coverage, it is so inferior to our independent flood insurance policy before the government got involved. It we ever did get in a position where the worst happened, we would be lose almost half of our investment. Before the government, it was paid for in full; and yes, a larger premium by $200 per year, but THAT is what we wanted; peace of mind.

I felt the same way--until this year when our lake came up 7 feet. We were one of the few who had coverage.

"The thing that killed me was they said I had 45 days to get the insurance unless FEMA lets you off the hook," Kaiser said. "When you contact FEMA, they tell you it takes 60 days to process the paperwork." Haha, I can't wait for Government Health Insurance. This is a prime example of WHY the Government is important BUT, has it's place and it shouldn't be ANYWHERE in the Insurance business of any kind.

"Not only are many lenders charging hefty commissions for these transactions, they often have ties to the insurance companies that issue the policies." Like so many things in modern American life, the companies and institutions involved in flood insurance are huge, far away, and disconnected from the reality of the local situation. Plus, both government and private actors have every incentive to require the homeowner to purchase something he or she does not need. The gov't agencies get more power and the big insurance companies get more money. With that glaring example of what can happen, are you sure you want the government to take over your healthcare?

"Chase settled the class-action suit in February, agreeing to pay $10.1 million to about 49,000 borrowers and modify its insurance requirements to conform with the law." --- That works out to $200 per borrower. Just the cost of doing business for Chase which probably made that much on commissions alone. Until penalties get higher, these big banks will continue to walk all over consumers.

This is not the governments role. Grandfather the old policies then let them drop when they lapse and apply the new standards. Also regulate lebnders so they are not profitting from insurance or selling it. This isn't difficult, till the government gets involved. Average people understand what's right and I'd even suggest that many areas which are insurable now shouldn't be. People should know better than to build on a floodplain and if they do, expect floods.

ramstrong: you can bet if regulators looked into it, they would find the banks are getting a piece of insurance action somehow. That 45 days deadline when it takes 60 days for the paperwork indicates something stinks about this whole set up.

Well I am a bit confused. While your lender may require flood insurance(or think they can) due to flood maps, it is not expensive if you are a preferred risk. We had flood insurance thru our insurer American National which was backed and paid by the US Govt.. It was only issued/claims adjusted thru the insurer. The govt has handled the flood insurance program for decades is my understanding. In our case, the yearly fees were under $400 while we were a preferred risk(3 or fewer claims). After Katrina and the 3rd claim, the price jumped to $1200. These prices were a few years ago. If you go to a private insurer and that insurer both issues, adjusts and PAYS the claim, watch out. That appears to be what is being said here. But why would you do that? You can always get the federal version and argue with FEMA later if need be while the decision works its way thru the Federal morass that functions as our govt. BTW Katrina exposed who you wanted for an insurer and who you did not. I can name names but I suppose they will pull the comment. Suffice to say, the largest insurers who employ their own adjusters were not the ones to have when the chips were down. The smaller well funded companies who hired outside adjusters for emergencies were the ones to have. You got a much more objective opinion on your claim.

There may be some mistakes as comment229 mentioned but I think a lot of these people simply don't want to pay for the insurance. I'm betting most of the people in Duluth would have thrown the same fit about required flood insurance insisting it wasn't needed.