The CEO of Allstate has joined the chorus demanding that lawmakers overhaul the National Flood Insurance Program.
“The flood insurance situation needs to be completely redone,” Allstate CEO Tom Wilson said.
Wilson called on the government to create a more streamlined flood-insurance program that doesn’t overburden taxpayers, according to a Reuters report.
Search and compare product listings for insurance against Overland Flooding from specialty market providers here
The NFIP was set to expire at the end of this month, but lawmakers recently gave it a reprieve, extending its life to December 08. However, the program was already $25 billion in debt to the Treasury – and that was before hurricanes Harvey and Irma slammed into the southern United States. Combined claims for the storms will ultimately exceed the program’s spending authority, NFIP Director Roy Wright told Reuters.
Learn more about flood insurance at the Future of Flood event being held in Miami, Florida on November 16. Click here for more details and to register.
While it’s likely Congress will extend the NFIP’s spending authority to cover Harvey and Irma claims, Wilson worries that efforts to reform the program will go by the wayside once the crisis is in the past.
“Once these hurricanes go past, once tornadoes go past, people tend to have short memories,” he said during an investor conference in New York.
Wilson said he would like to see a streamlined insurance system that covered flood and wind damage, rather than a “patchwork” system where a federal program covers floods and some state-backed insurers cover wind and hail, Reuters reported. Wilson said that lower-risk property owners would also need to be part of the system in order for it to function properly.
“Not enough people buy it, and the people who do buy it use it more than they should,” he said.
NFIP limits haven’t been changed since 1994, Reuters noted. They’re currently up to $250,000 for residences and $100,000 for contents. They don’t cover additional living expenses or damage to basements.
“Congress needs to give us more authority to change those coverages and align things in ways that conform to the industry,” Wilson said.
Related stories:
Allstate rocked by European court ruling over trademark
