Hi everyone! This week’s article is one out of The Insurance Journal and it is polarizing. Basically, the government has funded a $161 million project to upgrade levees in the Mississippi river valley. At first look, this program is beneficial and we will undoubtfully help the citizens in this area. The thing most people don’t realize about FEMA (the federal flood program that funds this project) is that they start in the red every year and write off their losses at year end. They don’t pay for a nickel for the losses. They are either printed, borrowed or taxed to get back to black. The epitaph to this wonderful idea of theirs, is that they will give all of the homes in these flood zones a break for 5 years while the levees are upgraded. In the insurance industry no one writes free insurance mainly because it’s a good way to go broke. Essentially that is what the government is doing. Besides all of that, the exposures of this hazardous work is breathtaking not only to the citizens of these areas but to the nation as a whole. We are being set-up for failure and the government thinks it is doing us a favor; NO! In any pool of insurance you must pay a commensurate premium for the exposure. They are breaking a fundamental rule of insurance by approaching it this way. The funding needs to be there while the exposure is the most prevalent and then credit for premium will happen as exposure units decrease. Think of it this way; they are fixing the levee’s (rememer they have borrowed the money already and they are 161 million in the hole), then a flood happens (anywhere) the government will simply reach into their pocket again, right? No they have to go through appropriations commitee’s, lawsuits, congressional panels ad infinitum; all the while these people are basically left for dead. No thank you Mr. President! You must make sure the project is funded with REAL money before you start it. I don’t mind paying my fair share if it means that we don’t go broke. But, this is just one mad-hatters opinion. Please leave yours!!!