AP Explains: Harvey shines light on flood insurance program
(Rachel Denny Clow/Corpus Christi Caller-Occasions by way of AP). Particles lies on the bottom at Copano Cove in Rockport, Texas on Wednesday, Aug. 30, 2017. Houses sustained main injury from Hurricane Harvey.
By KEVIN FREKING Related Press
WASHINGTON (AP) – The huge flooding Harvey has prompted in Texas and Louisiana comes as Congress weighs renewing a federal flood insurance coverage program that regularly pays out greater than it takes in by means of premiums, probably leaving taxpayers on the hook for $24.6 billion and counting.
The Nationwide Flood Insurance coverage Program expires Sept. 30. Congress is more likely to reauthorize this system earlier than then as a result of failure to take action would disrupt coastal actual property markets. If this system expires, present insurance policies would stay in impact, however no new insurance policies could possibly be issued.
The query for lawmakers once they return from the August recess subsequent week is whether or not to move a brief-time period extension that retains this system operating largely as-is for the subsequent few months or move an extended-time period extension that makes extra drastic modifications and places this system on firmer monetary footing.
This is a take a look at this system and the way some lawmakers want to change it.
HOW DID THE PROGRAM START?
Congress created the Nationwide Flood Insurance coverage Program in 1968 to scale back the rising expense the federal authorities assumed after pure disasters to assist restore broken houses and companies.
One of many key objectives of this system was to get cities and counties to scale back the danger of flooding and higher shield buildings from flood waters.
If the communities comply with undertake such steps and be a part of this system, their residents and companies can then buy federal flood insurance coverage to guard themselves from losses. When communities do not take part, it means their residents and enterprise house owners can’t purchase federal flood insurance coverage and are thus ineligible for a federally backed mortgage.
WHO GETS COVERAGE THROUGH THE NATIONAL FLOOD INSURANCE PROGRAM?
Householders who stay in areas which have a 1 % probability of being inundated by flood waters in any given yr should buy flood insurance coverage as a situation of getting a federally backed mortgage.
About 5 million insurance policies are in impact for people and companies. The insurance policies generate about $three.three…