New Flood Insurance Funding FarShort

Register now

WASHINGTON - (09/23/05) -- The ink is barely dry on new federalfunding for flood insurance and administrators of the NationalFlood Insurance Program are saying it's not nearly enough to paythe existing claims for Hurricane Katrina. In fact, the BushAdministration is saying it may need as much as ten times the $3.5billion available under the newly passed legislation to pay the170,000 claims expected from the massive hurricane. Congressquickly passed a bill this week that will double the availablefunding to pay flood claims to $3.5 billion. But White Houseofficials were projecting they may need more than $30 billion topay all of the claims for properties damaged or destroyed byKatrina. And that's for the homes and businesses that are properlycovered under the only flood insurance program in the country,administered by the Federal Emergency Management Agency. FEMAofficials are estimated there may be as many as 200,000 moreproperties that are not covered by flood insurance, potentiallyputting lenders at risk for the damages. Lawmakers were meetinglast week to discuss the massive shortfall in flood insurance andhow to handle it.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER