Flood Insurance

Flood insurance has bothered me on several levels. I guess I have been a little self righteous about my opinion that people shouldn't live in flood zones.
I will concede that the forces that cause people to live or work in flood-prone areas are often beyond the control of the folks that live and work there. For that reason it seems like a good idea to have some form of flood insurance. It also seems reasonable that the government help to pool the risk. The government can do it on a not-for-profit basis, provide a very large pool, and guarantee payments in the face of a large incident. All this is ok with me.

The part of the policy that makes no sense is that the insurance will pay to rebuild where a flood has just happened. Flood insurance should pay out for a given location only once. The owner should be given a choice; either build again and live without insurance, or be bought out of the land entirely. Once the land is bought it can be sold for uses unaffected by flooding, and especially for flood protection.

With this policy the land that is prone to flooding is taken out of uses that will be damaged by flooding.

The problems with this idea, beside the polical impossibility, is a situation like New Orleans. There are lots of reasons why city should be able to rebuild.