I think the issue is that the Law of Unintended Consequences is as relentless as Murphy's Law.

Problem: No insurance company is stupid enough to insure house in a floodplain.

Solution: Implement National Flood Insurance subsidised by everyone's tax money in order to "help" people who live in a floodplain.

Effect: Living in a flood plain is now more attractive. People have less inscentive to avoid a risky area.

Worse, some people purposely pack their crawlspace with old TV's, furniture and other "expensive" items that they can claim as losses every time it floods. They probably feel they are "entitled" to it.