The problem with leaving it out of regulation is that you get the exact scenario that is playing out in Texas - people buying homes and not getting flood insura

The problem with leaving it out of regulation is that you get the exact scenario that is playing out in Texas - people buying homes and not getting flood insurance and then when the homes are destroyed the "consequences of the market" came through but now you have millions of homeless people whose chief asset just got literally washed away. If flooding were something localized to single homes every now and then society as a whole could endure the "expense" of having a few homeless destitute people on occasion when their homes just disappeared and it would not be a major problem. But this isn't just microeconomic consequences. When entire neighborhoods are demolished and nobody had flood insurance it causes major problems for the rest of us. Just because it is hard does not mean it is not worth doing. The alternative is to keep sticking fingers in ears while billions of taxpayer dollars go to rebuilding in areas that are at extreme risk to be destroyed again.