With rising anxiety over delayed reauthorization of the National Flood Insurance Program, the term "cherry picking" is increasingly heard. Some fear that if private insurers are allowed into the full flood insurance market, they will undercut NFIP premiums for homeowners in moderate risk areas. The term disparages an essential and beneficial element of free, competitive markets — sellers offer their products at prices that reflect their costs. Those employing the charge of “cherry picking” should be careful, because it implies that they want to trap the “moderate” risk homeowner in the NFIP and tap only them for further subsidizing the “high” flood risk homeowner.
The accusation of “cherry picking” is really a diversion. The real issues are fair/transparent free market pricing for flood insurance for everyone and encouraging everyone to buy flood insurance to further community sustainability. Any concerns about the limitations of a free market in providing access to fairly priced flood insurance should instead be carefully explained — without hyperbole. Any arguments for flood insurance subsidies for folks in high hazard areas should explain precisely who should be subsidized, how much, why it is justified, and exactly who should pay for the subsidy, why, and how. Those being excused from contributing a reasonable share to the cost of subsidies should be clearly identified. A side note to keen political observers: there is no small irony in seeing some who scream the loudest about “cherry picking” — given past “conservative” stances.