In 1968, Congress created a National Flood Insurance Program when homeowners found that they could no longer buy private flood insurance.
The federal government now partners with private insurers to offer flood insurance, but according to an op-ed piece in Thursday's New York Times, the federal government bears the risk to the tune of "$527 billion of vulnerable assets in the nation?s coastal flood plains."
The Times piece says the program has paid out more than $24 billion in coastal flood plain claims between 1978 and 2011, with Hurricane Katrina alone counting for $16 million. Early estimates for Hurricane Sandy payouts are about $7 billion, and the program is already $18 billion in debt, the Times said.
Some say it's time for the federal government to stop backing up flood insurance, which essentially subsidizes homeowners who choose to live in risky coastal flood-prone areas.
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