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Hurricane Irma leaves national flood insurance billions in debt

Hurricane Irma flooded Miami, pushed a storm surge across the Lower Keys and swamped the Southwest coast of Florida. Residents continue to tally their damages, and a manager from the National Flood Insurance Program said that Irma and other serious storms have burdened the agency with $20 billion in debt. He explained that his agency wants to control losses by doubling enrollment, buying re-insurance and catastrophic bonds and encouraging private insurers to offer more policies.

Much of the debt arises from benefits paid to homeowners in areas designated with moderate flood risks. Their premiums typically cost under $500 a year and do not reflect the costs of insurance because flood map designations ultimately mean little.

The number of Florida homes insured by the national program is almost triple the number in any other state. The federal insurer has so far processed roughly 28,000 flood claims totaling $850 million. The Keys received $100 million in compensation, and Miami-Dade and Broward counties collected $30 million and $7 million respectively. Private insurers have paid about 900,000 claims for various types of damage, but only 1,700 claims were for flooding. Altogether, private insurers have reimbursed policy holders for close to $8 billion.

With insurance companies facing so many claims, they sometimes put up roadblocks against people filing legitimate claims for wind damage or roof damage. A person encountering delays or an outright denial from an insurance company may wish to consult an attorney familiar with hurricane damage claims. After studying the terms of the policy, an attorney may be able to challenge an insurer's reasons for refusing to reimburse a policy holder. An attorney's discussions with an insurance adjuster might resolve the situation, but filing a lawsuit remains an option to defend the rights of a person confronted by a bad faith insurance issue.

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