H OUSING N EWS R EPORT
May 2016
established in 1968 with the goal of providing affordable flood coverage to homeowners. But rates for some properties in high-risk areas can be higher. The federal government’s flood insurance program is grappling with $23 billion in debt, largely due to hurricanes Katrina, Rita and Sandy. The average flood insurance premium for high-risk properties in the New Orleans Zip Code of 70118 is approximately $779 per year, according to the federal flood insurance program, which subsidizes the cost for homeowners in high risk areas. The average flood insurance claim is $40,900. In the moderate-to-low risk Miami Zip Code of 33169, the annual cost for flood insurance is $420. Policies through the National Flood Insurance Program top out at $350,000. While flood insurance isn’t mandatory, homes and businesses in flood-prone areas must carry flood insurance to qualify for federally backed mortgages. About 5.2 million people have Continued Next Page
association. “Over the last two years it’s been relatively quiet, which worries me.” In the United States, floods are the most common natural disaster. Nine out of 10 natural disasters in the United States involve flooding, yet less than 15 percent of the nation’s homeowners and renters have purchased flood insurance, according to the Insurance Information Institute, a New York- based industry trade group. Flood Insurance: Government as Primary Insurer Standard homeowners’ insurance policies don’t cover flood damage, so homeowners must buy special coverage to add that protection. The average flood insurance premium for flood insurance is about $650, according to the National Flood Insurance Program (NFIP), a public program administrated by the Federal Emergency Management Agency (FEMA) that was
Franklin W. Nutter President Reinsurance Association of America Washington, D.C. “ Usually, 50 to 60 percent of the insurance losses get passed on to reinsurers. We’re the safety net of the insurance industry. ”
SOURCE: RealtyTrac
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