Selling flood insurance is a risky business. So risky that many private companies won't even touch it. And so the federal government has stepped in. Now, the government has to insure homes that are at a high risk for floods. Hurricanes Harvey and Irma showed us the flaws in this program. The National Flood Insurance Program (NFIP) is $30 billion in debt to the U.S. Treasury. If it were a private company, it would be bankrupt. And instead of preventing risky behavior, the NFIP may be encouraging it.
Among the NFIP's many problems are houses that flood again and again and again. Throughout the program's history, one percent of homes have been responsible for more than 25 percent of the claims. The NFIP can't drop these homes.
This week on the show: Why does the U.S. Government pay to rebuild homes in high risk areas?