Deluge of repeat claims for NFIP

Deluge of repeat claims for NFIP

Deluge of repeat claims for NFIP The National Flood Insurance Program is facing a flood of its own – repeat claims.

Over the last two decades, the number of properties reporting a second loss has increased by 67%, according to Evan Hecht, president of The Flood Insurance Agency.

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“The number of properties that have had a third loss has increased 56%,” Hecht said at IBA’s recent CAT Risk 2017 Masterclass.

The Federal Emergency Management Agency defines a repetitive-loss property as one that has two or more claims of more than $1,000 over the course of 10 years. A severe repetitive-loss property has had at least four claims of more than $5,000 each, or at least two claims that total the building’s current value, according to Emergency Management Magazine.

There are 11,000 severe repetitive-loss properties in the country, and that number is growing – largely due to the effects of climate change, Emergency Management reported.

Joe Rossi, chairman of the Marshfield and Massachusetts coastal coalition and a member of a FEMA task force aimed at improving the flood claims process, said that extreme flood-risk properties only account for a small fraction of the NFIP’s five million active flood policies – but they account for about 30% of its claims. 

“These properties give the program a bad name, when the program was designed so no-one could be labeled non-renewable,” Rossi told Emergency Management. “The rates for these structures are significantly higher; they don’t get off scot-free. There are penalties.”

The NFIP, which must be reauthorized by the end of September, is almost $25 billion in the red, Emergency Management reported.


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1 Comments
  • Rusty 7/25/2017 10:42:35 AM
    While those properties in the extreme flood risk category with repetitive claims may not "get off scot free", they are still highly subsidized by US taxpayers like all NFIP policies.
    Post a reply