Disaster Zone

FEMA Buying Reinsurance for National Flood Insurance Program (NFIP)

It is a good strategy and investment given the size of recent flood events.

by Eric Holdeman / January 10, 2018

It is not totally new, but for 2018 — FEMA is looking for more insurance coverage, FEMA Expands Flood Reinsurance Program with Private Reinsurers for 2018.

A bigger fix is needed for the program. That being charging appropriate market rates for coverage that will actually cover losses incurred by flooded properties. Congress actually passed legislation to do this a few years back and then the increased premiums started showing up in constituent mailboxes, and that caused Congress to backtrack on fiscal responsibility in order to keep their voters subsidized and happy.

The linked story also has a web link at the bottom that the Trump administration is looking to stop providing coverage for new homes being built in flood zones by 2020. I certainly would support that idea. For people to get a home loan, they have to have flood coverage, if they are in a flood zone. Cities, counties, builders and developers will all certainly push back on that since it impacts their economic development brought on by new construction. 

It is a crazy world that we live in. The administration on one hand is trying roll back anything having to do with climate change and impacting communities' abilities to expand their development. Then, the above, noting the continuing impact of flooding, perhaps brought on by climate change ... they are trying to roll back future liabilities to the National Flood Insurance Program (NFIP).