Feb. 17 (UPI) — The Federal Emergency Management Agency says its National Flood Insurance Program was forced to borrow $2 billion to help pay claims following Hurricanes Milton and Helene to help cover many more billions of dollars in losses.
“The widespread, devastating flooding following hurricanes Helene and Milton re-emphasizes the financial effects flooding can have not just to survivors, but also the National Flood Insurance Program,” Elizabeth Asche, senior executive of the program, said in a statement.
FEMA, which will borrow extra money from the U.S. Treasury, said that as of Feb. 6, the two hurricanes brought more than 78,000 claims, with an estimated $10 billion in possible losses.
According to the Congressional Research Service, as of Jan. 25 the flood insurance program, which is administered by FEMA, had $615 million on hand to pay claims.
“We are strategically utilizing short-term borrowings in 60-day increments, demonstrating our careful and responsible management of the borrowing authority,” Asche said.
The flood insurance program could face losses that total from $6 billion to $7.4 billion, officials say. As of last week, according to FEMA, more than 57,400 claims just for flood insurance that totaled more than $4 billion. That number was not broken down by state.
“This borrowing action follows payouts in 2024 from several large-scale and back-to-back flooding events,” FEMA officials said this week.
Hurricane Helene made landfall at Perry, Fla., on Sept. 26 as a Category 4 storm. Hurricane Milton made landfall near Sarasota, Fla. on Oct. 9 as a Category 3 storm.
FEMA said its combined losses from 2024 “have depleted the [flood insurance program’s] funds generated from premiums to pay claims.”
The program is funded by the premiums on flood insurance policies, and it did not need to borrow money between November 2017 and the present.
FEMA said that while the flood program’s premiums are usually sufficient to pay claims in years without catastrophic floods, factors due to climate change caused heavy rain events in 2024, which in turn “caused massive, widespread damage resulting in tens of thousands of flood insurance claims.”
Flood insurance “is not designed to pay for multiple catastrophic events in a single year without additional financial assistance,” the agency said.
FEMA’s flood program has been reauthorized 32 times; its current reauthorization expires March 14.
