Compose a 500 words essay on Flood Insurance: Why dont insurers assume this risk and why dont homeowners purchase the coverage. Needs to be plagiarism free!Due to cost both insurers and homeowners do

Compose a 500 words essay on Flood Insurance: Why dont insurers assume this risk and why dont homeowners purchase the coverage. Needs to be plagiarism free!

Due to cost both insurers and homeowners do not want to participate in flood insurance.

Insurers do not want to assume the risk of flood insurance due to expense. Without the National Flood Insurance Program subsidy, some private insurers refuse to provide flood insurance (Birkland 107). This was the case in the instance around the Green River Valley after the Army Corp of Engineers reported the intentional releasing of water of the Howard Hanson Dam due to fears of high waters making the damaged dam fail (Welch). The Army Corp of Engineers had to release waters creating a small flood, or risk losing the whole dam and causing a major catastrophe flood. As a result, private insurers without the backing of the National Flood Insurance Program dropped homeowners in the Green River Valley. The Federally funded insurance remained an option, but at a fixed value. Homeowners would only receive a set amount of compensations, no matter what the homes are valued at.

Homeowners likewise do not want to buy flood insurance due to expense. Flood insurance costs around $650 a year (FEMA 2). When homeowners live paycheck to paycheck an extra $50 to $75 a month for insurance that will not pay for all expenses of a flood, the insurance suddenly does not seem like a good idea. This is especially true in low risk areas. Homeowners do not conceive that floods could occur in areas like South Nevada and other dry areas. The truth is plumbing failures, air conditioning failures, and other flood damage can occur even in the desert. The extra money paid out seems like a waste in these areas until a water heater corrodes, or a sink faucet breaks shooting water until contained.

The damage of floods can be extensive. Normally, depending on type of flood, floods render homes a total loss. The water damage is a given, but mold can have a house condemned. Most floods cause not only personal property damage, but home damage as well. Insurers do not want to pay out