[Lee Stewart]

Flood insurance: Harvey tests a broken system



The flooding in the Houston area caused by Hurricane Harvey is just the latest problem for the already troubled National Flood Insurance Program.

The federally-funded program, which is part of FEMA, is the only protection against flooding that most homeowners and businesses can hope to get, since private policies typically only cover the wind damage that's associated with hurricanes, but not flood damage.

But after a series of major storm caused floods in the last 12 years, including Hurricane Katrina in 2005 and Superstorm Sandy in 2012, the program is roughly $25 billion in debt. It has less than $2 billion in cash on hand, with only $6 billion more leftin borrowing capacity as it prepares for the claims that will be filed due to Harvey.

Most homes in the affected area don't have flood insurance, but about 400,000 homes in the counties affected by Harvey do have policies. The average claim in the last 12 years has been for about $50,000, which means this storm could quickly deplete the fund's remaining resources.

*SNIP*

http://www.msn.com/en-us/news/us/flo...cid=spartandhp