The federal program that provides most of the nation’s flood insurance has run out of money to pay claims, forcing it to borrow $2 billion from taxpayers.
The Federal Emergency Management Agency, which runs the program, said Monday that claims worth billions of dollars due to catastrophic hurricanes in 2024 “have depleted” the program’s reserves.
The borrowing will enable FEMA to pay insurance claims from flooding caused by hurricanes Helene and Milton and other events last year. Interest payments on the $2 billion will reduce the program’s capacity to pay insurance claims but will not affect insurance premiums, FEMA said.
The insurance program is not designed to be self-sustaining and has borrowed money from the U.S. Treasury numerous times after draining its reserves, most recently in 2018.
