Federal program is still trying to resolve claims that it received 10 years ago
The U.S. National Flood Insurance Program is still struggling to recover from 10 year-old claims that have yet to be resolved. Despite efforts to assist the program in its recovery, the program continues to have trouble when it comes to providing consumers with flood insurance protection and handling claims in an appropriate fashion. Many of the program’s financial issues can be traced back to Hurricane Katrina, which had a major financial impact on the U.S. as a whole.
Massive debt is crippling the federal flood insurance program
The federal flood insurance program is currently $23 billion in debt, and federal lawmakers have not been able to solve the program’s problems. In 2012, lawmakers approved the Biggert-Waters Flood Insurance Reform Act, which called for private insurers to play a larger role in the flood protection market. The legislation also caused flood insurance premiums to grow, which placed homeowners under greater financial strain and caused many complaints that eventually lead to federal lawmakers taking action against growing premiums.
Creating a private flood insurance market may provide consumers with better coverage options
As the National Flood Insurance Program continues to struggle to recover, the federal government is beginning to turn to private insurers in order to ensure that homeowners and businesses have the flood protection they need. Earlier this year, lawmakers introduced the Flood Insurance Market Parity and Modernization Act. The legislation is designed to encourage the development of a private flood insurance market that will provide homeowners with an alternative to the federal flood insurance program. It may also provide states with more flexibility when it comes to licensing private flood insurers.
FEMA and Congress are working to overhaul the federal flood insurance program
The Federal Emergency Management Agency manages the National Flood Insurance Program. The agency has received many complaints regarding the operations of the federal program and is now working with Congress to overhaul the program. Of the $23 billion that the program owes to the federal government, only $1 billion has been paid back and more work must be done to ensure that the program becomes financial solvent in order to adequately handle claims coming from consumers.