NFIP: Homeowners “In Denial” About Flood Risk
Homeowners in the US are frequently “in denial about their flood risk and lack needed insurance protection,” writes David Maurstad, chief executive of the National Flood Insurance Program (NFIP), in an op-ed in the Palm Beach Post. “Unfortunately, most Americans are in denial about their flood risk and lack needed insurance protection. Where it can rain, it can flood. Many only find that out when disaster strikes and they struggle to rebuild.”
Maurstad outlined the steps being taken to improve the NFIP and help it deal with the increased costs associated with more numerous and stronger storms. “It’s no secret that Hurricanes Katrina, Sandy, Harvey, Irma and Maria rocked the financial foundation of the program. Flood claims from those storms far exceeded the funds available from policyholder premiums to pay or insured losses.”
“It is unrealistic to raise premiums enough to make-up the deficit from extreme events. As a result, Congress enabled the NFIP to borrow funds from the U.S. Treasury in order to pay claims, thereby assisting property owners and communities to recover quicker. Let me be clear: borrowing is a temporary measure put in place while NFIP works on ways to improve its financial framework and other critical reforms continue,” Maurstad said.