Critics point to the National Flood Insurance Program

“Critics point to the National Flood Insurance Program as an example.  Everyone feels compassion for those who have lost their homes and possessions due to flooding, right?  Maybe not.  Many insurance companies refuse to underwrite flood insurance in certain locations because the potential liability exceeds the premiums they can charge.  The US National Flood Insurance Program resulted from recognition that private insurance companies can€™t provide coverage at affordable rates that would allow them to be profitable.  In order to receive coverage, however, communities that benefit must adopt and enforce floodplain management policies to mitigate threats to life and property damage in flood-prone areas.  Critics assert that taxpayers should not be required to subsidize those who choose to build in known floodplains €“ they know the risk, they should accept the risk.  Is thisdonor fatigue?  What do you think?  Explain your position. 
***Part 2 Separate Question and Separate page 
A very simplistic formula for risk management is expressed as Probability + Consequence + Mitigation Cost = Informed Decision. Consequence is usually the first element that people consider, followed by an assessment of the probability that something bad will actually happen. They can then consider the cost of mitigating either the consequence or the level of probability. Regardless of what they ultimately do, the key factor is that their course of action will be an informed decision. Whether they will make the right decision is another matter altogether.
This week€™s readings include material from MCEER, a national Center of Excellence at the University of Buffalo, which provides research to enable communities to become more disaster resilient in the face of earthquakes and other extreme events.
Could resources like MCEER have made a difference in the 1995 Kobe earthquake in Japan?  One of the reasons for the catastrophic damage in the Port of Kobe was the revelation that it had been built largely on landfill. The seabed in the port essentially liquefied. There was a perception that this information was unknown or not fully understood. In fact, the port authority was completely aware of this fact. A risk assessment had accurately forecast the level of damage that would result in the event of a major earthquake. It was known that engineering technology existed that would involve the use of extensive pilings to shore up the seabed in the port. It was also known how expensive such a process would be. In the end, the decision turned on how likely they believed that a major earthquake would occur. In essence, they rolled the dice and lost. The cost to restore the port was exponentially greater than it would have cost to reinforce the seabed.
Using the risk management formula above, where did the planners at Kobe go wrong?  Were they incompetent? Irresponsible?  Or just unlucky?”

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