Responding to FEMA

[xoxoxoBruce]

About 6 months ago I refused to renew my flood insurance, because they increased the premium over 400%, closer to 500%, and could give me no reason. Am I cutting off my nose to spite my face... wouldn't be the first time.

Anyway, today I got a letter signed by Edward L Connor, Acting Federal Insurance and Mitigation Administrator. The envelope was mailed from that snailmail spam center in Hartford, CT, where so many ads come from. It may even have been sent at the request of my insurance company.

A little Googling finds old Ed is real, and gives me his office mailing address, I figured it's only good manners to respond to his letter... not that he'll ever see it, before some civil servant trashes it.

[gvidas]

Buying insurance is the act of taking a stand, in $, on risk. You're saying something like, "the cost of recovering from a disaster times the probability of it occurring is greater than the total cost of insurance from now until the risk is gone."

If you can tell that the potential cost is not worth the insurance cost, it's a bad bet. The risk is still there -- but the risk was still there with insurance, too. And it's easy to get intimidated (legitimately, perhaps), since, unlike poker, you don't typically play more than a hand or two.

I love writing righteously indignant letters, and I liked reading yours.

[xoxoxoBruce]

A year after I bought the place, the Feds came along and declared it flood plain. Having a mortgage requires buying flood insurance, and he mortgage was paid off, years ago. Although changes in the landscape and removal of streamside obstructions have shown a considerable reduction in it's being prone to flood, I kept up the insurance. The premiums have increased with the cost of living of course. Once the water came up to one of my sheds, and the insurance wouldn't cover 99% of the items in the shed, only a mower. In the cellar of the house, it will cover the washer, dryer, boiler and water heater, nothing else. Chances of it getting to the first floor are extremely small, but in that case, throw out upholstered furniture, and rugs, sand the floors, start again. Not the end of the world.

[classicman]

Very well done xob. Nicely written.

[Lamplighter]

The feds say the house is in a flood plain, but nothing with "fed" on the letterhead can be trusted.
Is this a "belief" or "faith" that rivers don't rise ?

The slogan over Ed's office door reads:
"Pay it now or pay it later, but don't think later won't be more."

[Undertoad]

Give em hell Bruce, er I mean, Household Decision Maker.

[skysidhe]

You weighed the costs, and made the decision the scales were tipped too far on the side of profit. Their profit, your loss.

If you stand to lose less this way,more power to you.

[smoothmoniker]

We went through a similar decision process with Earthquake insurance. The premiums and the deductible were so high that the break-point between cost of insurance and cost to rebuild without insurance was about 10-years. If we go 11 years without an earthquake, we will have paid more in premiums than we would get back in payout if the house ever goes down.

[Clodfobble]

But the key is, if you're not funneling that premium amount aside into an emergency savings account, when the earthquake comes in the 11th year, you'll still be fucked.

[Lamplighter]

Plus, buying insurance (if you can afford it in the first place) is not only going to pay for damage, if it happens,
it is also paying a "service fee" each year for the company to assume the risk.

Often too, the problems of evaluating property insurance vs payments is the companies have
their own way of evaluating amount of the policy vs today's replacement costs (i.e., depreciation vs inflation).
The are details where the devil hides.

[xoxoxoBruce]

Originally Posted by Lamplighter

The feds say the house is in a flood plain, but nothing with "fed" on the letterhead can be trusted.

It's not a matter of my trust in "Fed", by them making that declaration, they give the state, and these fucking yuppie locals, the power to pass draconian regulations. By local code, I'm not allowed to have a can of gas for the lawnmower on site. I'm not allowed to have a stack of firewood on site. I'm not allowed to build a garage to put the cars in, because in a flood the gas and oil in the cars would pollute the water... the same fucking cars that now sit outside. It gets more ridiculous from there.

Is this a "belief" or "faith" that rivers don't rise ?

It's a $2200 hydrological mapping, with the data run through the Corps of Engineers own computer program, plus 77 years of exact stream flow records for drainage of 61.1 square miles, and 30odd years of my observation confirming the predicted results.

The slogan over Ed's office door reads:
"Pay it now or pay it later, but don't think later won't be more."

So Ed's a prick, must be friend of yours.

[smoothmoniker]

Originally Posted by Clodfobble

But the key is, if you're not funneling that premium amount aside into an emergency savings account, when the earthquake comes in the 11th year, you'll still be fucked.

There are better forced savings plans than this one. Like having my employer skim the extra 1k per month into a retirement account before I even see it.

[xoxoxoBruce]

If you can afford the 1k loss. Now you have to talk your employer into matching it.

[footfootfoot]

my brain sizzled at the thought of an extra 1K a month. Hell, my brain sizzled at the thought of 1K a month.

[smoothmoniker]

That's how much earthquake insurance would cost.