Arguments on a Hybrid Privatization of the U.S. Flood Insurance Program: A Debate Driven by Issues of Sustainability

Patricia H. Born, Robert W. Klein
July 15, 2019
Africa, Asia - Pacific, Europe, Latin & South America, North America
Ethics & Social Justice
32 pages
flood, public interest, National Flood Insurance Program (NFIP), privatization, insurance
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All arguments considered, we suggest that expanding the sale of private flood coverage would be welfare enhancing and in the public interest. While there are sev- eral forms of “privatization” that are advocated for the National Flood Insurance Program (NFIP), we advocate here a form of privatization that reflects elements of both market competition and public-sector support. Our proposed “hybrid” privatization of the NFIP involves legislative and regulatory measures that would make it easier for private companies to offer flood insurance on their own paper. Our proposals are consistent with the developing interest for public-private part- nerships to tackle thorny issues of community vulnerability and economic sus- tainability. Our suggestions provide insights into devising a scheme that would be efficient, equitable, and more politically palatable to all stakeholders.