USA Today has an editorial on federally subsidized flood insurance:
The creators meant well, but here's the flaw: The program's premiums don't reflect the actual risks, especially in an era of rising sea levels and extreme weather. As a result, federal insurance has encouraged developers to overbuild in risky areas, buyers to purchase there and residents to rebuild even after repeated flooding....Sandy shows that bigger changes are needed...eliminate taxpayer subsidies of the insurance market. Premiums would surely rise, some drastically, reflecting the true risk of living so close to the water. And that's the whole point.