Congressional Digest

Congressional Digest December 2012 No. 10 Vol. 91
National Flood Insurance Program Overview

The High Cost of Floods

Mitigating the Impact of Floods on Communities and the Federal Budget

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National Flood Insurance Program Overview

Background on NFIP and Issues for Debate

In 1968, Congress created the National Flood Insurance Program (NFIP) to address the increasing costs of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods. Since its inception, the NFIP has earned sufficient premiums in almost every year to pay flood losses incurred by policyholders, and borrowed from the U.S. Treasury in catastrophic loss years to meet revenue shortfalls. Because of extraordinary losses incurred following the hurricanes in 2005, however, the program carried a debt of $17.775 billion as of January 31, 2011. As it currently stands, there is a widespread consensus that the NFIP…

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