The National Flood Insurance Program (NFIP) is currently careening down an unsustainable path, leaving the government prey to colossal potential losses, according to the head of the agency running the program. According to Craig Fugate, Head Administrator at FEMA (the Federal Emergency Management Agency), the insurance program is currently costing the US, roughly $1 trillion in assets. Fugate said that the agency is barely able to keep its head above the water with the program’s interest payments, despite having direct access to even the lowest taxable rates that the US Treasury Department has to offer. Even still, the amount of money FEMA has borrowed to maintain and further this insurance program has continued to increase; in November 2012, FEMA owed $20 billion, and that number has since grown to over $24 billion. Congress needs to continue to explore potential pathways to put a cap on excessive program costs, according to Fugate, whether that involves changing insurance rates or putting more available resources into encouraging Americans to live a reasonable distance away from flood-prone areas.“We must make sure to examine the true sustainability and feasibility with our existing systems,” Fugate states. “We must think about where this path will drift in the future and how we would proceed from there.” However, with the current budget resources as well as the time required to draft new flood maps and engage in local and state governments involvements to enact such changes, the expected completion of redrawing the maps would be in another three or more years. Senator Mary Landrieu, D-La., chairwoman of the subcommittee, said Congress must consistently remain focused on potentially building a new flood-insurance program that is responsive and flexible with the communities, does not restrict or damage local economies through high premiums, and allows for minimal government interference at local and state levels (to keep the process as expedited and efficient as possible). She did say however, that she was willing to equip FEMA with the resources it claims to need to successfully revamp its present operations and speed up the mapping and insurance adjusting processes. “I believe it’s imperative that Congress remain consistently active and engaged in ensuring that the agency and its other partners continually have access to the resources they need to do their jobs and streamline the process to the best of their abilities,” she said. EAB INSURANCE is a full service Insurance Agency that has been identifying and meeting the insurance needs of home and business owners throughout NJ, NY, PA, MD, & CT since 1950 with corporate headquarters located in Green Brook, New Jersey.
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