XNSURIT wrote:
> You have it pretty well figured out. The premiums are not actuarially
> sound. You can read that as not enough premium to cover the risk. Everyone
> gets to help pay the claims. Wait, hold the presses. Everyone who pays
> taxes gets to help pay the claims. That is no where near everyone.
What grouses me are the terms "one hundred year flood", "500 year
flood", etc. It gives a very false sense of security to the ignorant.
These are stupid terms and very very misleading.
A "100 year flood" essentially means that any given location has a 1%
chance of flooding to that level each year. That seems pretty low
risk, until you consider that an entire watershed has multiple places
where flooding can and does occur. So, you end up with 100 year floods
somewhere in a watershed every couple of years. The Mississippi river
gets "500 year floods" every 20 years. Period. But the location of
that flood changes a bit depending on the position of the weather
systems and other factors.
So, let's think about this. WHY would I want to build my house in a
location that has a 1% chance of flooding EVERY year, and in reality,
thanks to the magic of statistical massaging, that means that over a
20 year period of time, it's closer to the 40-50% category. Yes, you
read that correctly. If you live in a 100 year flood plain, over a 20
year period of time you have a 50/50 chance of getting flooded.
Another factor on the percent of risk calculations is that they are
based on historical data with only a modicum of effort made to
understanding how changes to the watershed and waterways change the
risk.
This last summer, we had some serious flooding in Colorado. It was a
fascinating situation because an ENTIRE watershed got something like
five inches of rain in 24 hours. Five inches is pretty easy to handle
if it is localized, but it is a disaster if it occurs over 100% of the
watershed.
--
Ken Norton
ken@xxxxxxxxxxx
http://www.zone-10.com
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