The large number of people who have been seriously affected by the recent hurricanes, Harvey and Irma, asked for help and went to the Federal Emergency Management Agency. After an entire country saw the terror those natural disasters inflicted on the people’s houses and lives, it was natural for them to try and seek help from wherever they could. So, in the days that followed after disaster struck, those people went to ask for money to start rebuilding their homes. Unfortunately, most of them didn’t have the specific type of insurance coverage to help them in such a case. And while they qualified for small amounts of money, that wasn’t enough.
National Flood Insurance Program
Right now, both Florida and Texas are still struggling to cope with what happened and to untangle the web of various charities and agencies which should deal with this. However, not many people know what actually is this National Flood Insurance and how does it work. In order to shed some light on the matter, we should go back some years, in 1968, when president Lyndon B. Johnson created it through the National Flood Insurance Act. He took this decision after seeing numerous private insurers backing off from the business. In their opinion, flood insurance didn’t bring profit.
It seems like this flood program works by taking some of the financial risk owners have and transferring it to the government. In return, it only asks the communities which are vulnerable to floods to respects certain building rules and to have flood mitigation strategies. Also, people should know that not everyone can benefit from this program. Only those in the 22,000 flood-prone areas established by the program can buy the policies from their insurance agents. Those who live in dangerous areas need to buy the flood policies. However, those outside the danger zone might have a chance at an optional policy.
It’s important to know the details
According to recent reports, the program is currently $25 billion in debt. It reportedly collected it after the 2005 hurricanes and after 2012’s Sandy Superstorm. This is why many groups have criticized the program. They say it won’t be able to support the people in need of help. At the moment, it’s uncertain if it will be able to even pay the debt.
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