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Federal Emergency Management Agency: Challenges for the National Flood Insurance Program

GAO-06-335T Published: Jan 25, 2006. Publicly Released: Jan 25, 2006.
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Highlights

The National Flood Insurance Program (NFIP), established in 1968, provides property owners with some insurance coverage for flood damage. The Federal Emergency Management Agency (FEMA) within the Department of Homeland Security is responsible for managing the NFIP. The unprecedented magnitude and severity of the flood losses from hurricanes in 2005 challenged the NFIP to process a record number of claims. These storms also illustrated the extent to which the federal government has exposure for claims coverage in catastrophic loss years. FEMA estimates that Hurricanes Katrina, Rita, and Wilma will generate claims and payments of about $23 billion--far surpassing the total claims paid in the entire history of the NFIP. This testimony provides information from past and ongoing GAO work on issues including: (1) NFIP's financial structure; (2) the impact of properties with repetitive flood losses on NFIP's resources; (3) proposals to increase the number of policies in force; and (4) the status of past GAO recommendations.

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Topics

Claims processingDisaster recoveryFinancial analysisFinancial managementFlood insuranceHurricane KatrinaHurricane RitaHurricanesInsurance lossesNatural disastersPerformance measuresProgram evaluationProgram managementSubsidies