But the situation would not be almost so dire without decades of well-intentioned but deeply flawed federal programs. But as of June 30, there were only 8,380 active flood insurance policies in ME, down 9 percent from 2012. Firms walked away from the business entirely. Organizers say many lost their homes and fell victim to NFIP fraud and abuse, despite paying flood insurance premiums for decades.
Flood insurance is underwritten by the federal government. There have been thousands of cars that have flooded in the Houston area as well as Florida.
The New Deal enshrined this idea on an unprecedented scale, making the idea of disaster relief central to the modern welfare state. A homeowner must have a separate policy to cover flood-related losses, defined as water traveling along or under the ground. In effect, the government became the insurer of last resort.
Critics of crop insurance point out that some farmers plant crops in high risk areas just to collect the insurance.
At the same time, the government needs to do more to convince or compel more at-risk homeowners to buy flood insurance which would be harder to do if it were to raise rates.
Building a home on the shores of the ocean or in a designated flood plain is also risky.
It was a novel idea, but implementation proved problematic in the 1950s and 1960s.
About 400,000 homes in the counties affected by Harvey have policies, as do about 500,000 homes in counties along the Florida Gulf Coast.
Who can purchase flood insurance?
"There is no flood coverage unless they have a flood insurance policy", he said. Insurance is the law of large numbers where some risk groups subsidize others.
Census shows uninsured rate at record low
The ACA helped lower the uninsured rate by ushering in new health insurance requirements and expanding eligibility for coverage. Before the Affordable Care Act was implemented, about 41.8 million people, or 13.3% of Americans, were uninsured in 2013.
White endorsed the idea, hoping it would proceed on "an experimental pilot basis".
The NFIP was set to expire in a few weeks on September 30. When that mortgage is sold to investors, the company that services it must make sure the premiums are paid or pay them through escrow. That fell to the government, but it still didn't have accurate flood maps to do so.
Real estate data company CoreLogic estimates that approximately 70 percent of flood losses from Harvey will be uninsured. Consequently, "the federal government had no assurance that the communities' flood-prone lands were being developed wisely". Even if federal aid money is provided, it can often take much longer to trickle down to homeowners, delaying recoveries from flooding. Part of the problem was that this restriction went into effect just as banks started to securitize mortgages.
Every day we make decisions based on risk.
"All the sudden you're paying a loan on your house along with your mortgage", said Bob Hunter, the director of insurance for the Consumer Federation of America and the former Commissioner of Insurance for the state of Texas.
Congress attempted to fix this mess by passing an overhaul of the NFIP in 2012.
"Servicers may be contractually on the line, but if they don't have the capital, then they can't pay up", Wachter says, adding that taxpayers could be further exposed if clusters of homes default at the same time, reducing the value of houses around them. But two years later, feeling the political heat, lawmakers backtracked.
"If we don't have active hurricane flooding, even though there are a lot of flood events that occur with regularity, people don't tend to think about purchasing insurance or doing something to help mitigate the chances of loss", Lindsay said.
But it won't last. "And I think greatly discourage development in unsafe areas", Pilkey said. No amount of disaster relief will change that.