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Hurricanes Prompts Concern Over National Flood Insurance Program

— October 14, 2017

The devastation wrought by Hurricane Harvey’s torrential rains could lead to an overhaul of the National Flood Insurance Program.

The Texas Tribune wrote in a recent article that there’s “never been a greater need for the program,” citing recent disasters brought on by tropical storms and hurricanes. Widespread flooding has caused billions of dollars in damage over the course of the past month and a half, with Texas, Florida, and the U.S. territory of Puerto Rico all being especially hard-hit.

However, the NFIP has struggled to itself afloat financially. After two major hurricanes – Harvey and Irma – and the prospect of paying billions in damages, lawmakers are looking for a way to overhaul a program which likely couldn’t survive without assistance from the Treasury.

Republican Rep. Pete Olson (R-TX) said he’s open to making changes.

But Olson, who represents one of Texas’ worst-affected districts, said he won’t run the risk of his constituents losing their payouts from Harvey.

Flooded street in Houston, TX, following Hurricane Harvey. Image courtesy of Michael Stravato, for the Texas Tribune.

The NFIP is one of a scarce handful of programs that provides insurance to individuals living in flood-prone areas. Many residents of oft-hurricane-affected states, like Florida, do not have the option of selecting flood protection from a homeowner’s insurance plan – even in the rest of the country, homeowner’s insurance agencies tend not to cover any damage caused by flooding of any variety.

The Texas Tribune speculates that it’s unlikely any member of Congress will outright call for the abolition of the NFIP, which covers over a half-million Americans in Texas alone.

However, there is now a distinct possibility that lawmakers may try finding new ways to shift some of the responsibility into the private market.

Some activists and members of Congress say now is good time to amend perceived deficiencies in the NFIP, arguing that the program encourages people to build homes in high-risk areas.

“We keep rebuilding areas that are at a very expensive cost to taxpayers,” said Rep. Vincente Gonzalez (D-TX).

Gonzalez has, in the past, criticized the government’s administration of the NFIP, noting that claims are often processed slowly.

“I think the government shouldn’t, probably, be in the business of insurance,” he said.

But plausible solutions seem hard to come by – funding for the NFIP doesn’t seem sustainable, while the insurance industry shows no inclination toward wetting its feet in flooded markets.

“We’re going to fix it because it’s going bankrupt,” said Rep. Olson. “People depend on it.”


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