After Hurricane Harvey, the question of whether the U.S. House of Representatives will extend funding for the National Flood Insurance Program is more important than ever.
But what will happen if an agreement cannot be reached?
“Right now the [flood insurance program’s] debt is currently around 20 billion dollars,” Tourial says. “So what happened was [the federal government] forgave $16 billion … in the wake of Hurricane Harvey, but then it had to borrow another $6 billion to keep paying claims.”
Despite the program’s financial difficulties, Tourial says claims are still being paid out as they should be. But longer term, the program’s viability might be threatened since there’s an upper limit of $30 billion to its borrowing.
“The general consensus right now is that the program, as it’s currently designed, can’t bring in enough revenue to pay off claims from [another] major storm, like a Harvey,” Tourial says. The increased frequency of major storms means that premiums paid by flood insurance policy holders aren’t keeping up with claims.
There is a July 31 deadline to reauthorize the program, but Tourial expects a stop-gap solution. “They’re probably not going to pass a full reauthorization given we have … just a week,” Tourial says. “So it’s gonna be the short-term extension of the program.”
Web post prepared by Josue Moreno