Milton threatens to trigger flood insurance reckoning for Congress [View all]

Source: Politico

10/09/2024 09:43 AM EDT


Hurricane Milton, a monstrous storm set to hit western Florida Wednesday night, is poised to deplete the finances of the government’s chronically indebted flood insurance program. Congress is already bracing for a fight over what to do about it.

Key lawmakers and aides are beginning to game out the likely impact on the National Flood Insurance Program, which is the primary option for millions of American homeowners to protect their finances from catastrophic flooding.

The emerging view from several lawmakers and staffers is that NFIP claims spurred by Milton and last month’s Hurricane Helene will likely exhaust the program’s nearly $5 billion in funds and force it to tap $9.9 billion in Treasury borrowing authority. While the NFIP collects premiums and pays out claims similar to a typical insurer, it’s been upside down financially because of weaknesses in how it assessed flood risks for decades and giant losses brought by devastating storms including Hurricane Katrina.

Some on Capitol Hill expect Milton could push the NFIP to the edge of what it can borrow from Treasury, potentially forcing Congress to raise its borrowing cap or to pursue some kind of alternative funding to ensure that claims are paid.

Read more: https://www.politico.com/news/2024/10/09/hurricane-milton-congress-flood-insurance-00183017