Got flood insurance? Thousands of homeowners in Hurricane Florence’s path do not
“That is completely within the realm of likelihood with this storm,” said R.J. Lehmann, a flood insurance specialist with the R Street Institute, a Washington-based think tank. “Something like Katrina is unlikely but not impossible. Florence is a 400-mile-wide storm, with 30 inches of rain projected in some places.”
Lehmann estimates there are 400,000 homeowners holding federal flood insurance policies in the Carolinas, Virginia and Georgia, totalling $106 billion in coverage. If 10 percent of those sustain flood damage, the insurance program could be on the hook for at least $10 billion in payments, more than what was paid out after Hurricane Harvey or Superstorm Sandy in 2012.
That’s a problem, he said, because another costly hurricane could exhaust the insurance program’s resources, forcing FEMA to once again borrow from the U.S. Treasury.
“This program since 2004 has borrowed $40 billion from taxpayers and has only paid back less than $3 billion of that money,” Lehmann said. “That is a direct subsidy from people who are not at risk to people who are at risk.”
In recent years, the R Street Institute, insurance companies, environmentalists and other taxpayer advocates have founded a group called the SmarterSafer Coalition to reform the National Flood Insurance Program. The coalition has pressed Congress to invest more in floodplain mapping, facilitate more private insurance and force certain high-risk homeowners to pay more for insurance.