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Federal Flood Insurance Program: Broke and Broken

Tuesday, November 7, 2017
Federal Flood Insurance Program: Broke and Broken

It is likely old news to most insurance consumers that the National Flood Insurance Program (NFIP) administered by FEMA is plagued with challenges. Challenges as in problems. Many. Big. Problems.  This excellent New York Times article provides a sobering analysis of the problems. 


As illustrated by the excellent chart below, although many policyholders feel their flood insurance premiums are already too high, the costs to pay all claims occurring in years with catastrophic flooding events GREATLY exceed the total premiums received over many years combined. The NFIP is not exactly a good business model.


Consumers should be aware there are a number of private insurance carriers that provide alternative and/or supplemental coverage solutions to the National Flood Insurance Program. These private carriers can often provide expanded protection (i.e. the difference in conditions or excess flood), cost improvements, and sometimes a combination of improved coverage and a lower cost.


To evaluate private placement flood insurance solutions, insurance consumers should contact an independent insurance advisor, like the Horton Private Client Group, that represents multiple carriers.  As with all forms of insurance, coverage terms and conditions vary among carriers, and established independent insurance firms are often able to help consumers explore multiple coverage solutions from different insurance carriers. 

Ken Sidlowski is a Senior Risk Consultant and Practice Leader with The Horton Private Client Group.  The Horton Private Client Group is a full-service risk management and insurance practice that specializes in high net worth and mass affluence personal insurance.  What makes us different?  We lead with advice and consultation.  Our trusted advisors are salaried professionals (not commissioned agents) who provide unbiased guidance to advise our clients in all aspects of their personal risk management portfolio.   We have the capability to place coverage nationally and internationally through carriers such as Chubb, AIG Private Client, PURE, Nationwide Private Client, and The Cincinnati Insurance Company, and much more.  Contact Ken at (312) 989-1416 or  


Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.