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The promise of rainfall sends us running

Dec 15, 2013 Editorial

 

The recent flooding of several parts of the city and villages along Guyana’s low lying coastline highlights the perception that no serious effort is being expended by the authorities to prevent a recurrence of financial loss and physical suffering experienced by hundreds during the Great Flood of 2005.
It is a given now that the mere promise of rainfall sends many persons scurrying to place their hard earned belongings on high ground, or to find sand bags to protect their property from damage.
Flooding is a major source of loss to individuals and businesses; but except for 2005 those affected have not been able to access the type of government disaster assistance that should be automatic in a country like Guyana.
Flood coverage has not historically featured as part of standard homeowner policies provided by local insurance companies – at least at affordable rates.  Also it is no coincidence that a disproportionately high number of low-income households are without insurance since the cost benefits of paying premiums is not attractive all things considered.
Ideally, once builders are in compliance with minimum foundation elevation requirements insurance companies should have no serious reservations about underwriting flood insurance policies.
However, it would be incumbent on lending institutions to also ensure that borrowers’ construction plans comply with building regulations for the particular area.  The last is important since some areas are more prone to higher levels of water than others, and does not relieve central government and/or the relevant Neighbourhood Democratic Council (NDC) of their responsibility to maintain effective drainage and flood defence systems.
The US Congress created the National Flood Insurance Program (NFIP) in 1968 which offers flood insurance to homeowners, renters, and business owners if communities agree to adopt and enforce ordinances that meet or exceed Federal Emergency Management Agency’s requirements to reduce the risk of flooding.
What makes the introduction of a flood insurance desirable is the fact that Guyana is not affected by hurricanes or other tropical storms which form part of the normal weather patterns in some countries even within the Caribbean.
Therefore market penetration in this respect is achievable by the more forward looking in the insurance industry particularly in low-risk flood areas.  Of course this could be offset by the premiums generated in the high-risk flood zones as well as the damage costs.
Two of the benefits likely to accrue to homeowners must be the guarantee of reimbursement for flood damages; and not having to repay flood insurance benefits once a claim is paid.  Government will need to incentivize the private sector to provide flood insurance that is both available and affordable since it does not have the power to force insurers to compensate for its own failure to protect its citizens, and if it will not be emulating the NFIP model anytime soon.  A comprehensive examination of insurance regimes adopted by the Netherlands, France, Iceland, Germany and the USA may be a good point of departure for a responsive government.
The seasonal rainfall has begun and already people are complaining about the flood waters in their homes and streets.  The hue and cry about climate change and rising sea levels have apparently been relegated to the back burner in recent times.
Therefore it would be best if the government takes up the role of compensating all those who suffer loss not to mention inconvenience and discomfort since it is the government in whatever form that is responsible for flood defences.
Appropriate policy responses are required in the face of the increased frequency of extreme weather events including realistic investment in flood-protection infrastructure, the renewal of urban drainage systems, and innovative agricultural drainage practices.

 

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