From Missouri Digital News: https://mdn.org
MDN Menu

MDN Home

Journalist's Creed

Print

MDN Help

 MDN.ORG: Missouri Digital News
MDN Menu

MDN Home

Journalist's Creed

Print

MDN Help

 MDN.ORG Mo. Digital News Missouri Digital News MDN.ORG: Mo. Digital News MDN.ORG: Missouri Digital News
Help  

Flood insurance drowning in debt

April 24, 1997
By: Naomi Smith
State Capital Bureau

After the Great Flood of 93, Missourians leaped to purchase flood insurance to protect their most important investment--their homes.

Regular home insurance policies does not cover floods.

But the national program that pays money back to flood policy owners is now in debt- almost a billion dollars in debt.

Program officials say the debt does not effect taxpayers.

Naomi Smith has more from the state captial.

Story:
RunTime:
OutCue: SOC

The National Flood Insurance Program, the major source of flood insurance for most Americans, makes federal-backed funds available to its policy owners.

But the program is confronting a record of $818 million in debt.

George Riedel, manager of Missouri's Emergency Management Agency, says Americans holding flood insurance have nothing to lose.

Actuality:"into the program."
RunTime:
OutCue: George Ridel
Contents: "The debt should not effect the residents of Missouri whatsoever. You have to remember that the National Flood Insurance Program is a self-sufficient program. What's paid out are through premiums that are paid into the program." (939)

So how does the program continue to operate if it's in debt?

The answer is simple. It continues to borrow money from the federal treasury. In fact, Riedel says the program is authorized to borrow up to $1.5 billion to cover claims.

John Miller, Regional Director of the Federal Emergency Management Agency, says the run of recent flooding diasters in Missouri, Ohio and the Dakotas is the main cause for the debt.

Actuality:"on solid ground."
RunTime:
OutCue: John Miller
Contents: "In this particular time there has been a number of flooding diasters, but this too shall pass and in the future we shall be back on solid ground." 207

Miller says the number of homeowners who have purchased flood insurance has significantly increased in the past decade.

But Ridel says the increase is not just from homeowners. He says lending institutions require borrowers to purchase flood insurance to receive any federal-backed loan.

Actuality:"require flood insurance."
RunTime:
OutCue: George Ridel
Contents: "People want to live close to the river, close to the water, and if they are going to borrow money and its federally-backed, then lending institutions are going to require flood insurance." 975

Ridel also says the program is pushing insurance agencies to sell flood insurance to Americans in the belief that it saves payments for diaster relief later.

Sam Dennett, insurance broker with the Harrison agency in Columbia, says despite the push, mid-Missourians are not interested in flood insurance.

Actuality:"Flood Insurance Program."
RunTime:
OutCue: Dennett
Contents: "In boone county for example, yes there were a lot of people who decided to buy flood insurance after 93, many of them were required to because they received diaster assistance, and so yes you're going to see more people with flood insurance since 94. But still all in all there's just not a lot of participation in the National Flood Insurance Program."

Dennett says it's hard to convince Missourians to buy flood insurance.

But Miller says Missouri is high risk area for floods and homeowners should purchase the insurance to be safe.

Actuality:"inndate their dwelling."
RunTime:
OutCue: John Miller
Contents: "It behooves all persons living in the flood plains to purchase flood insurance to ensure that whether there's a diaster declared or not they will be covered in case flooding does inndate their dwelling." (143)

Miller assures Missourians the debt will not effect flood insurance owners or taxpayers.

Actuality:"will be reinbursed."
RunTime:
OutCue: John Miller
Contents: "I can assure you that the program is sound and is backed by the federal government and that anybody that has purchased flood insurance and has a legiminate claim will be reinbursed." 217

He also says people are using flood insurance and program is working, or there wouldn't be a debt in the first place.

From the state capital, I'm Naomi Smith.