The federal Government Accountability Office (GAO), a nonpartisan Congressional office, issued a report about the National Flood Insurance Program (NFIP). The report outlined three problems it found with the program. First, NFIP isn’t likely to amass a financial surplus as a bulwark against disasters because of the way it is designed. Second, there’s a disconnect between premium rates and flood risk, including allowing for grandfathered rates that are much lower than they should be, based on the risk. Finally, NFIP is not allowed to deny insurance because of frequent losses in a specific location. Thus, there are “repetitive loss properties, which represent only 1% of policies but account for 25 % to 30% of claims.”
According to the Federal Emergency Management Agency, which administers the flood insurance program, as of January 1, 2011, Connecticut had 38,514 flood insurance policies in force protecting $8,718,955,600 worth of property.
