WASHINGTON, D.C. — The Federal Emergency Management Agency (FEMA) has drawn $2 billion from the U.S. Treasury under the National Flood Insurance Act of 1968 to meet financial obligations tied to the National Flood Insurance Program (NFIP). The funds will be used to pay policyholders for extensive claims resulting from unprecedented flooding caused by hurricanes Helene and Milton in 2024.
The NFIP, which provides flood insurance to nearly 4.7 million policyholders nationwide, faced extraordinary financial strain after a year marked by back-to-back storms. Hurricanes Helene and Milton alone accounted for tens of thousands of claims, with damages extending across vast regions. FEMA estimates total NFIP payouts for Hurricane Helene will range from $6.4 billion to $7.4 billion, while Hurricane Milton is expected to result in payouts ranging from $1.2 billion to $2.9 billion. By February 6, 2025, Helene had generated more than 57,400 claims and $4.5 billion in payouts, while Milton had produced over 21,100 claims and more than $740 million in payments.
“The widespread, devastating flooding following hurricanes Helene and Milton reemphasizes the financial effects flooding can have not just to survivors but also the National Flood Insurance Program,” said Elizabeth Asche, Ph.D., Senior Executive of the NFIP. “We are strategically utilizing short-term borrowings in 60-day increments, demonstrating our careful and responsible management of the borrowing authority.”
This borrowing marks another instance in the NFIP’s long history of leveraging federal funds during disaster-heavy years. FEMA holds a total borrowing authority of $30.425 billion, of which $22.525 billion has now been tapped. Previous borrowing spiked following catastrophic events such as hurricanes Katrina, Sandy, and Harvey between 2005 and 2017. Despite this substantial debt, FEMA has maintained its commitment to fully compensating every eligible claim under NFIP policies—a promise it reiterates amid the current challenges.
Flooding remains the most frequent and costly natural disaster in the United States, underscoring the importance of insurance coverage for homeowners, renters, and businesses. The NFIP currently insures $1.3 trillion in property, providing critical financial protection against the devastating impacts of rising waters.
Moving forward, FEMA faces significant challenges in balancing the NFIP’s sustainability, particularly with increased storm intensity linked to climate change. The agency’s reliance on Treasury funds highlights the need for continued efforts to strengthen the program’s financial health while promoting broader access to flood insurance and mitigation measures. By ensuring policyholders receive the compensation they are owed, FEMA reaffirms its commitment to protecting American property owners from the growing risks of future flooding disasters.
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