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National Flood Insurance Program is billions of dollars in debt - KATC.com | Continuous News Coverage | Acadiana-Lafayette

National Flood Insurance Program is billions of dollars in debt

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The National Flood Insurance Program is set to expire on December 8th.

Lawmakers on Capitol Hill have been working for the past several months to come together to create a new reform plan for the program.

The reason for the reform is because over the last decade the program has been blowing through taxpayers money in the form of billions of dollars as they continue to offer low-cost insurance for homes in flood zones.

To understand more about why the program is facing such huge problems here is a brief history.

The National Flood Insurance Program was created by the federal government in 1968 when private insurers stopped covering floods as they nearly went bankrupt paying out damages following major floods of the 1950s and 1960s.

The thought was allowing the national government to oversee flood insurance they could offer a more affordable rate($500 per year) by spreading the burden of flood damages to everyone in a flood zone across the country.  

For the first 35 years, the program was successful taking in more money than it was paying out.

But the program had its first major catastrophe in 2005 when hurricanes Katrina and Rita hit the Gulf Coast.

Those 2 storms cost the National Flood Insurance Program nearly 18 billion dollars.

Then in 2012 Hurricane Sandy slammed the northeast racking up a 9.2 billion dollar bill for the program.  

And in 2016 there were 4 separate billion-dollar flood events, including the one last August right here in Acadiana, which cost the program another 8 billion dollars.

Going into this year's hurricane season the National Flood Insurance Program was already 24 billion dollars in debt.

With the devastation from Harvey, Irma and Maria most experts project the debt to double putting the program in a hole it will never be able to pay back the government.

In October Congress wiped away 16 billion dollars of debt from the program but as just previously stated that won't even cover the cost of the 3 major hurricanes that hit the country this past year.

Thus, Congress is going to have to really look at the program and make some tough choices if they want the program to continue.

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