Federal Flood Insurance Drains Taxpayers

The US government's National Flood Insurance Program is flush with debt.

Congress created the NFIP in 1968 to make reasonably priced flood insurance available to business owners, homeowners, and renters.

The NFIP makes federally backed flood insurance available in states, cities, and towns that agree to adopt and enforce floodplain management rules to reduce future damage.

In 2013, the program added a 15 percent assessment to its flood policies and gradually built up about $1 billion in reserves, but an epochal 2016 flood in Louisiana used up that money.

Legislate incentives at state and local levels to encourage private insurance companies to issue flood insurance policies to property owners and government agencies exposed to river flooding.

The federal government's authorization of the NFIP in 1968, a time when private flood insurance underwriting was not readily available, was well-intentioned.

By 2022 the NFIP was using insurance premium payments to cover the interest on its debt, and it had become clear that the program had only resulted in another bankruptcy backed by the federal government and funded by taxpayers.

https://mises.org/wire/federal-flood-insurance-drains-taxpayers