Key Issues > National Flood Insurance Program - High Risk Issue
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National Flood Insurance Program - High Risk Issue

The National Flood Insurance Program (NFIP) is a key component of the federal government’s effort to limit the damage and financial impact of floods, but it has not generated sufficient revenues to pay claims. Insuring property that is vulnerable to natural disasters exposes the federal government to financial risks.

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The National Flood Insurance Program (NFIP) has been on GAO’s High Risk List since 2006. As of August 2016, the NFIP owed $23 billion in borrowed funds to the Department of Treasury and is unlikely to generate sufficient revenues to repay these funds. This lack of sufficient revenue highlights what have been structural weaknesses in how the program is funded.  

The Biggert-Waters Flood Insurance Reform Act of 2012 contained provisions to help strengthen the financial solvency of the program, including phasing out some discounted insurance premiums. However, in 2014 Congress enacted the Homeowner Flood Insurance Affordability Act of 2014, which reinstated some premium subsidies and slowed down some premium rate increases from the Biggert-Waters Act.

 GAO has made a number of recommendations for the program aimed at improving

  • financial controls,
  • oversight of contractors,
  • and the Federal Emergency Management Agency’s management of NFIP.
Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.
Overview of GAO's Past Work on the National Flood Insurance Program
http://gao.gov/products/GAO-14-297R

GAO-14-297R: Published: Apr 9, 2014. Publicly Released: May 9, 2014.
  • portrait of Alicia Puente Cackley
    • Alicia Puente Cackley
    • Director, Financial Markets and Community Investment
    • cackleya@gao.gov
    • (202) 512-8678