“…which over time could prompt homeowners to vacate the most at-risk areas.”
The “plan” allows the private insurers to siphon off the low risk insurance policies, leaving the federal government with the debt laden ones. Ultimately FEMA is left with greater debt.
If flood insurance were profitable, we would not have created a National Flood Insurance Program. Now that some can see profit around the edges, they want to skim those policies off, leaving a larger unfunded burden for the NFIP.
Perhaps we need to learn a bit from the “six months of rain in twelve hours” that hit Wisconsin and realize these are natural disasters that affect the nation. While insurance for them is important, it should be one that covers wind, rain, flooding, tornadoes, wild fire, volcanic activity, earthquakes and mud slides. Create one risk pool for all. Or, maybe just realize the nation has an economic interest in fast recovery from natural disasters and plan accordingly in the federal budget.