Thousands of lower risk homeowners are effectively subsidizingflood coverage for those in higher risk areas, according to a floodmap advocacy company.

West Palm Beach-based Flood Zone Correction Inc. said yesterdaythat low flood risk homeowners in several states contribute more inannual premium to the National Flood Insurance Program than theyreceive in claims payments, and called on federal lawmakers to helpbalance out the program.

Policyholders in parts of Florida as well as those in Georgia,Michigan, Illinois, Nebraska, Maine and Idaho continue tocontribute more in annual premium payments than they receive inaverage annual claim payments, the company found. At the same time,homeowners in Alabama, Kentucky, Louisiana and Mississippi receivemore in claims than they pay in total premiums.

“Low flood risk policyholders cannot be expected to carry theload of high flood risk policyholders, nor will they be the key tobailing out the NFIP,” said Dan Freudenthal, president of thecompany. “We need a program that's fair to all policyholders in allflood risk categories. If the program's to survive, it must stopsubsidizing premiums of high risk policyholders. Those who aretruly at high risk for flooding and file the vast majority ofclaims must pay full actuarial premiums.”

Due to the calm storm season of 2006, the Federal EmergencyManagement Agency, which runs the NFIP, believes it has enoughfunding to cover claims until the summer months. Congress isexpected to extend the program's borrowing authority, but to attachseveral reforms to the extension. These would be aimed atincreasing the number of policyholders in the NFIP and bringingrates closer to their actuarial level.