Flood insurance may need more reform in the future
United States Senator Charles Schumer believes that major changes must be made to the National Flood Insurance Program. The federal program is typically the only place that homeowners can find flood protection, but this coverage is provided by private companies that work with the program. These companies have fallen under harsh criticism in recent years due to their handling of claims related to Hurricane Sandy and other disasters that have produced claims.
Senator Schumer calls for changes to be made to the flood insurance program
Senator Schumer wants the National Flood Insurance Program to abandon the system of private insurance companies it uses to manage policies and process claims. The federal program serves as a sort of safety net for private companies that are interested in providing flood protection. Insurers are not inclined to provide flood protection on their own because of how costly flooding disasters can be and the financial burden that such coverage represents. As such, the federal program exists to mitigate the risks that insurers are exposed to while still making insurance coverage available to homeowners and businesses.
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Flood insurance program continues to fight to overcome financial problems
Recently, flood insurance coverage has been growing more expensive. Homeowners in coastal regions or high-risk zones are beginning to pay more for their insurance coverage than in the past. Those with second properties are also spending significantly more for coverage. In April, the National Flood Insurance Program raised premiums on secondary residences by $250. Raising rates is a strategy that the program is using to overcome its financial issues, which have become quite severe in the wake of several natural disasters.
Homeowners are still trying to recover from Hurricane Sandy
Many homeowners are struggling to recover after the impact of Hurricane Sandy. Nearly three years after the disaster hit the eastern states, homeowners are still fighting with their insurance providers to have their claims approved. Making changes to the National Flood Insurance Program may be needed in order to help consumers recover from the disasters that they have fallen victims to.