Flood Insurance Claims from Hurricane Floyd Will Rank Second-Highest Ever

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Release date: 
March 1, 2000
Release Number: 
HQ-00-037

Washington, DC -- Damage from severe floods that ravaged more than a dozen states following Hurricane Floyd is resulting in substantially more money paid for flood insurance claims than originally predicted, according to officials of the Federal Emergency Management Agency (FEMA).

The latest figures available from the National Flood Insurance Program (NFIP) administered by FEMA show that more than $310 million has already been paid to settle 14,614 claims for flood damage that occurred when Hurricane Floyd dumped torrential rains on at least 14 states stretching from Florida to Maine beginning in mid-September 1999. The average paid claim was $21,237.

With approximately 9,500 additional claims still open, FEMA now expects that the total insurance payments from Floyd will reach $460 million, significantly higher than last fall's initial estimates of $300-350 million. That would make these floods the second-most expensive in the history of the NFIP, exceeded only by the Louisiana floods of May 1995, which resulted in nearly $584 million in paid claims.

Federal Insurance Administrator Jo Ann Howard pointed out that this money comes from premium income, not tax dollars, and that as more and more property owners take responsibility for their own protection by purchasing flood insurance, fewer need to rely on disaster assistance funded by U.S. taxpayers.

"Flood insurance not only greatly reduces government expenditures for disaster relief, it provides victims with much greater compensation," Howard said. "Disaster grants are a help, but they are very limited, and disaster loans have to be repaid with interest."

Howard said that notwithstanding the large sum paid for claims following Hurricane Floyd, the majority of Hurricane Floyd flood victims unfortunately did not have any flood insurance. She said that in North Carolina, for example-the state hit hardest by Floyd-only 81,000 policies were in force at the time "Nationwide, only about one-fourth of households in special flood hazard areas have flood insurance," Howard explained. "And the flooding in North Carolina clearly demonstrated that properties located outside the high-risk zones should also be protected by flood insurance. In recent years, floods--the most common type of natural disaster--have been occurring in places that never experienced them before."

Howard said that by contrast, 1,694,000 policies were in force in Florida when floods struck that state last October. Although flood losses there were much smaller in scope than in North Carolina and several other states, more than 10,000 claims totaling nearly $68 million were paid in connection with the Florida floods. This is more than all claims paid following Hurricane Fran (9,869) and Hurricane Georges (8,734). "But even for people who have flood insurance, insurance isn't enough," Howard said. "We need to motivate people to take further actions to reduce damage through FEMA's public awareness effort, Project Impact-Building Disaster-Resistant Communities, with which we're educating people to elevate, floodproof, or otherwise move structures out of harm's way."

The NFIP makes flood insurance available in communities that adopt and enforce ordinances to reduce future flood losses by regulating new construction. Currently, more than 4.2 million policies are in force in more than 19,000 participating communities nationwide, representing over $517 billion worth of coverage. Those who have questions about flood insurance may call the NFIP's toll-free information hotline at 1-800-427-4661.

Last Updated: 
July 16, 2012 - 18:46
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