US Congress boosts flood insurance pogramme’s borrowing power

Make text smaller Make text larger

  • Sandy's wrath: Staten Island was inundated by the effects of the superstorm

    Sandy's wrath: Staten Island was inundated by the effects of the superstorm


The US Congress on Friday approved legislation to increase the borrowing authority of the National Flood Insurance Program (NFIP) by $9.7 billion.

The House of Representatives voted 354-67 to keep the National Flood Insurance Program solvent and able to pay claims of thousands of homeowners who suffered flood damage in coastal New York, New Jersey and Connecticut from the October storm.

The Senate, which has already approved a similar increase but as part of a larger $60 billion Superstorm Sandy disaster relief measure, quickly approved the $9.7 billion for the NFIP by unanimous consent — moving it to President Barack Obama to be signed into law on his vacation in Hawaii.

The crucial vote came as the Federal Emergency Management Agency (FEMA) warned members of Congress that the NFIP would run out of money to pay claims for Sandy and other storms as early as today unless it approved additional borrowing authority.

The government-backed programme has already paid out more than $1.7 billion to survivors. But with nearly 140,000 Sandy claims, FEMA, which administers the flood programme, said without increased borrowing power, only about 25,000 of them would be covered from existing funds.

That information was revealed in a statement late on Wednesday from Dave Miller, FEMA’s associate administrator for the Federal Insurance and Mitigation Administration, which indicated that the agency is rapidly running out of funds.

The FEMA memo said that absent an increase in the NFIP borrowing authority, “payments on more than 115,000 claims in states across the country may be delayed until Congress increases the NFIP borrowing authority.”

Putting more money into the programme comes months after President Barack Obama signed a law aimed at improving its finances. Congress bailed out the programme after Hurricane Katrina in 2005, and it is nearly $20 billion in debt.

Standard homeowners’ insurance does not cover flooding. The US government set up its flood insurance programme in 1968 to provide affordable insurance, impose flood management policies on vulnerable communities and reduce federal disaster aid costs.

Critics of the programme complain it is inefficient and say it subsidises people who live and build in dangerous and environmentally sensitive flood zones.

The House of Representatives will consider the remaining portion of the aid package for Sandy victims worth $51 billion on January 15.

You must be registered or signed-in to post comment or to vote.

Published Jan 7, 2013 at 8:00 am (Updated Jan 6, 2013 at 4:32 pm)

US Congress boosts flood insurance pogramme’s borrowing power

What you
Need to
Know
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon

Take Our Poll

  • Which of the following best describes your opinion on how Senior Civil Servant job positions should be granted?
  • Senior civil servants should be appointed on a temporary contract renewable basis.
  • 74%
  • Senior civil servants should continue to be appointed on a permanent basis
  • 18%
  • Don't Know
  • 8%
  • Total Votes: 2155
  • Poll Archive

Today's Obituaries

View all Obituaries Place an obituary

Facebook Activity