The Federal Emergency Management Agency (FEMA) announced that more than 5 million Americans are now protecting their homes with flood insurance.

“Americans have begun to truly understand that flood insurance is an important part of protecting their home and property from the devastation of flooding,” said David Paulison, director of the Federal Emergency Management Agency, in a statement yesterday.

David Maurstad, National Flood Insurance Program administrator and FEMA mitigation director, credited consumers, insurance agents, lenders, real estate agents, state insurance commissioners, industry leaders and the news media with helping to make Americans more aware of the dangers of flood to their homes.

But even as the program celebrates this milestone, it faces a possible major overhaul in Congress.

Reformers hope the program will charge premiums that better reflect the risk in this age of increased storm activity and take a more proactive role in not funding the construction of homes on sites where there has been repeated damage.

In addition, reform legislation currently pending in Congress has become mired in the issue of how it is determined what damage is caused by wind (which is covered by private insurance) and what is caused by flooding (and therefore covered by the federal program).

“The program's growth could not have been achieved without a concerted effort by the NFIP and the program's partners, who have worked to encourage residents across the nation to understand the risks of flooding and learn about the limitations of traditional insurance policies,” Mr. Maurstad said. “Unfortunately, we've had a number of catastrophic natural events over the past few years, which also made people very aware of flooding risks.”

He credited better partnerships with the speedy settlement of nearly 250,000 flood insurance claims following the 2005 hurricanes.

“Those individuals, who were protected by flood insurance, are now well on their way toward a full recovery,” he said.

In the last two years, the NFIP policy in force growth has increased by more than 11 percent. Policy growth has been strongest in Florida, Texas and Louisiana, but other states have seen increases as well. Still, Mr. Maurstad said, more needs to be done.

Special Reports /

FEMA Marks 5 Million Flood Policies

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