Flood Insurance Program Extended

By JIM ABRAMS – 19 hours ago

WASHINGTON (AP) — The House voted Thursday to strengthen the Katrina-swamped national flood insurance program, but provisions to extend the 40-year-old program to cover wind damage drew a White House veto threat.

The legislation, passed 263-146, extends through 2013 a program that provides affordable insurance, not always available on the private market, to homeowners in flood-prone areas while imposing land use and building requirements aimed at reducing future flood damage.

It is estimated that the program, which takes in about $2.7 billion in premiums annually, normally saves the Treasury $1 billion a year in flood-loss expenses.

But that all changed with the 2005 hurricane season when claims from Katrina and Rita exceeded the aggregate amount of all the claims previously paid in the history of the program.

The program's borrowing authority, limited by law to $1.5 billion before 2005, was raised three times by Congress, to the current $20.8 billion. The new legislation would increase that to $21.5 billion. The NFIP now owes the Treasury about $18 billion.

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