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What is the Flood Insurance Program?



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Former Metro Editor of the Times Picayune, Jed Horne,  explains the genesis of the of the National Flood Insurance Program – and how insurers are taking advantage of it.


Floods cause an average of $2 billion in damage every year: they are the most common natural disaster in the Untied States. Because floods are so costly, private insurers stopped providing flood insurance in the 1920s.


Congress enacted The National Flood Insurance Program in 1968, after Hurricane Betsy, devastated the Lower Ninth Ward in New Orleans. Before that, federal disaster relief - taxpayer dollars - was the only way to clean up after a flood.


Congress hoped that homeowners' premium payments to the National Flood Insurance Program would cover damages, with the federal government guaranteeing their claims. That was until Hurricane Katrina hit.






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Walter Leger, board member of the Louisiana Recovery Authority, describes the deal the government initially made to the state of Louisiana – if you didn’t have flood insurance – you wouldn’t be eligible for any help.


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NFIP - The National Flood Insurance Program.  The federal program that guarantees homeowners are covered for flood losses.

FEMA - The Federal Emergency Management Agency.  Administers the NFIP.

WYO - Write Your Own insurance:  FEMA's name for outsourced flood insurance policies. FEMA contracts with existing insurance companies to sell, adjust, and settle flood claims.