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Tropical Cyclone Sandy Puts New Stresses on NFIP

The federal government’s National Flood Insurance Program (NFIP) is at risk of running out of funds because under law, the NFIP can add only an additional $3 billion to its debt...
November 15, 2012

The federal government’s National Flood Insurance Program (NFIP) is at risk of running out of funds because under law, the NFIP can add only an additional $3 billion to its debt. Early estimates suggest that Hurricane Sandy will rank as the nation’s second-worst storm for claims paid out by the NFIP, with the cost potentially reaching $7 billion. However, 44 members of the House of Representatives have called for Congress to appropriate money as needed to help victims recover from the storm. As the result of recently passed legislation, FEMA now has the authority to raise NFIP premiums by as much as 25 percent per year over the next five years for vacation home owners and those repeatedly hit by floods.

Flood Insurance Faces New Stress (New York Times 11/12/12)