You seem to have an ideological objection to the argument. Maybe you should simply state that you are perfectly okay with a city of people being left in dire straits (heh) when the river overruns its banks or the levees break.

I can understand that, even if I don't agree with it, and that makes a lot more sense than saying my argument is faulty when what you really believe is that a society that takes care of its own is faulty ;-)

People are naturally risk adverse. Government subsidized flood insurance incentivises people into living in locations they wouldn't otherwise live. The free market is telling people not to live there because it's prohibitively costly. Government puts people's life in danger by manipulating the cost of living in dangerous places. It forces society to fit the bill for the endless cycle of destruction then reconstruction.

Besides the fact government interference in the insurance market does more harm than good to those it intends to protect, the wealthy are the ones that most benefit from government flood insurance. The vast majority of people that live in places where insurance is unavailable or too expensive are those wealthy enough to build a house on a hurricane prone beach. (Think too of the fire/earthquake prone hills of glorious sunny California)

What you're really asking for is those of average means to subsidies second beach houses for the rich. Not only is your argument faulty it's immoral.

We're all better off taking care of ourselves than being taken care of by morons. The government solution to a problem is inevitably worse that the problem itself.

The cities are already there. That's a done deal.

And of the people that live there, not everyone lives there because they CHOSE it. Not everyone has the ability to up and move to a newer, safer city simply because they're worried about floods.

It's just not that easy.

So, given that cities ARE built on flood plains, and that flood insurance IS refused for those people that live there, what are we going to do? Abandon them entirely when a flood happens?

Good luck with that. What do you think will happen to the government that says "too damn bad, you should've moved?"

By the way, if you think Winnipeg is 'beach houses for the rich,' dude.. yeah..

Why do you (and raganwald) portray the choice as assistance-or-total-abandonment?

Sure, provide infrequent rescues, emergency aid, and damage-mitigation. Just avoid complete 'make-whole' reimbursements, and make the costs come marginally more from those areas subject to frequent, foreseeable disasters... so that there's an incentive gradient for future moves/development to get-out-of-the-danger-zones. Not a "too bad" all-or-nothing ultimatum, but also not blank-checks for folly.

Otherwise, you're subsidizing more destruction and misery. That has been a real legacy of much unconditionally-'compassionate' weather aid, at least in USA flood and hurricane zones.

I've never lost a house because of a flood or hurricane or whatever, but I'm pretty sure that governments don't do make-whole reimbursements. Could be wrong..

That said, at least in Canada, I believe that federal, provincial and municipal governments share the burden of paying for restoration after a disaster. That is more or less what you suggest - there's a slight incentive to move away from Manitoba (for example), because they instituted a tax-hike to pay for their last flood. http://www.cbc.ca/news/canada/manitoba/story/2012/04/17/mb-b...

Or do what Western Europe did : FIX the country layout so the danger zones stop being danger zones.

We do actually have the ability to prevent a lot of this. Flood zones, dams, flood plans, ...

Here's my stance on the whole thing:

Natural disasters which are so far outside the realm of prediction as to become 'black swan' events are, of course, horrible, and everyone benefits from pooling resources to combat these situations (although this is rarely in the form of insurance, and more in savings).

But I view insurance premium pricing (as with all other pricing) as a signal, more than as a result of reckless profiteering. If you're looking to move into a house and the insurance on it is too expensive for you, it means you can't afford that house. Flood/earthquake/volcano risk is equally as important a financial aspect of the property as its purchase price, and just like we saw with the subprime loan crisis, giving credit to those who can't afford it is generally a bad idea. Even if you're prepared to bail out all the institutions which hold that credit, you still get crises.

Now of course, the insurance premium scales with the price of the property, so in an area which often floods, the TCO of houses with a purchase price of X will be inflated to X * (1 + Y) (with the flood risk premium Y calculated by the underwriters based on historical data and predictive models). This means your purchasing power in a flood plain should have a multiple of 1/(1 + Y) compared to outside the flood plain. Basic laws of supply and demand mean that fewer people would be able to, or choose to live in such an area, and therefore the catastrophe of a flood (including the burden on the underwriters) would be lessened accordingly.

There once was a time where people would indeed travel great distances to improve their living situation, and I've done this myself on a few occasions, taking apartments that were much further from the area I wanted to be because the rents on the more central places were too expensive for me. The idea that people have a human right to be able to afford whatever they want, subsidized by everyone else, is a very recent idea indeed, and it's one which I feel isn't standing up to the test of time.

In terms of healthcare, a great analogy to 'flood plains' would be people who continuously put their life and limb at risk by engaging in acts which are well-known to be harmful: smoking, excessive unhealthy eating, and substance abuse. My point is illustrated by the prolonged debate in countries with socialized healthcare on how to treat smokers, the obese, and drug addicts. It's by no means a solved problem, but my point is that you can't refer to the example of publicly-subsidized insurance of individuals who take above-average risks as an example of why we need more of that exact same thing.

Just because one does not agree to financially compensate people for "Acts of God" does not mean they are "perfectly okay with a city of people being left in dire straits".

There is a difference between losing your life and having to empty your savings. Questioning whether or not I am responsible for my fellow man's finances seems fair.

He is saying that people should pay for their actions when they move to a high-risk area. Unfortunately, they cannot properly evaluate the risk because insurance companies cannot create due to competition with the "free" bailouts provided by the government.

It's an analogy. If you accept the premise that the market for health insurance has similar properties to the market for flood insurance, namely that the information about who needs it is readily available, then those two markets are broken in similar ways.

I do get what you are saying though. Why do we let people live in flood plains when they can't afford to have their homes be destroyed? In other words, if they don't have the means to self-insure.

Well, we could have the government regulate flood plains and forbid anybody from building homes there. But there are already homes there, so that ship has sailed. So basically, the government, representing the collective will of the people, has decided that it won't let people's lives be destroyed, even if they decide to live in a risky area.

If you apply this logic to health insurance, there are people who are uninsurable in exactly the same way as having a house in a flood plain makes you uninsurable. If you have cancer already, no insurance company will insure you against cancer. There's no chance of you net having cancer. The costs are known. Asking for insurance is like trying to get something for free.

But as a society we probably don't want these people to just die because they aren't insured. So we have to all agree to some solution that doesn't depend on private insurance.

The implication in your wording is that a lot of people who live outside the flood plain are compensating people living in Winnipeg for their flood damage, but the way I read it, the citizens of the province of Manitoba are doing the compensating. Since over half the population of Manitoba lives in Winnipeg, it's not quite the black-and-white "taxes are theft!" scenario your wording makes it sound like.

I hope you're leaving this comment from a perfectly flat plain that never floods, is out of tornado country, has no mountains nearby to cause landslides, is far away from any earthquake faults, is out of hurricane territory, never has heatwaves, and never gets blizzards. Otherwise, I'm calling hypocrisy.