“since 1968 the U.S. government’s National Flood Insurance Program (NFIP) has been subsidizing a significant number of its policyholders to build and live in flood-prone areas. As a result of losses outstripping its premiums, the NFIP is $20.5 billion in debt. In a recent article in Regulation, Peter Van Doren, a senior fellow at the libertarian Cato Institute, points out that the often highly concentrated nature of flood disasters would require private insurers to charge premiums amounting to 5 to 9 times the average claim in order to remain solvent. Few people would buy such expensive policies.
Last fall the NFIP launched its Risk Rating 2.0 program which is raising the rates for nearly 75 percent of its policyholders. Premiums may increase by as much as 18 percent per year for owner-occupied homes and 25 percent for second homes. Over time, such increases will incentivize people to move away from areas where the sea is engulfing their homes and businesses.
A growing body of research suggests that at least some Americans are beginning to factor sea level rise into their purchases of beachfront property.”