The National Flood Insurance Program is in the red, and approaching tropical storms aren’t likely to help the situation.
Part of the problem, according to a USA Today investigation, is that the federal program pays, over and over, to homeowners whose property is repeatedly damaged:
“A USA TODAY review of FEMA records found that the owners of 19,600 homes and commercial buildings worth $25,000 or more have collected insurance payments that exceed the value of their property. The records exclude property addresses.
“In Fairhope, Ala., the owner of a $153,000 house has received $2.3 million in claims. A $116,000 Houston home has received $1.6 million. The payments are for damage to homes and what’s inside.
” ‘It’s the ultimate statement on the failure of the nation’s strategy to deal with flooding and flood risk,’ said environmentalist David Conrad of the National Wildlife Federation, who has received FEMA’s Outstanding Public Service Award for promoting flood safety. ‘It does seem to fit Albert Einstein’s definition of insanity — to somehow expect something different when you do the same thing over and over again.’
“USA TODAY also found that the owners of 370,000 second homes and rental houses get huge insurance discounts. Wealthy resort areas such as Hilton Head Island, S.C., and Longboat Key, Naples and Sanibel, Fla., have some of the largest numbers of second homes and rentals getting the discounts.
“The program’s financial problems reflect a broader government reluctance to restrain benefits. FEMA leaders and some lawmakers have tried to end the premium discounts and the multiple insurance payments, ‘but there’s always been a few in Congress that have had enough political muscle to hold that back,’ former FEMA assistant administrator David Maurstad said.”
Before you start thinking this is just a coastal problem, remember that 97 percent of counties across the country have experienced a flood disaster in the last 30 years, according to the USA Today story.
A Congressional Budget Office report provides rich detail on other problems that the National Flood Insurance Program faces [PDF] — from the increase in the number of severe rainfalls in flood-prone areas of the U.S. to the problem with outdated flood maps.