Flood Insurance

Pursuant to a congressional request, GAO provided information regarding the National Flood Insurance Program (NFIP), which the Federal Emergency Management Agency's (FEMA) Federal Insurance Administration administers.

GAO found that: (1) as of December 31, 1987, NFIP had about 2.1 million policies with a total insurance value of about $162 billion; (2) although NFIP has had a net cumulative operating deficit of about $652 million over the past 10 years, it has had an operating gain in each of the last 2 years; (3) coastal communities in general held about 72 percent of the policies, high-hazard areas held about 3 percent, and the eight Great Lakes states held about 10 percent; (4) losses from January 1978 through October 1987 totalled about $2.4 billion, with repetitive losses accounting for about $1 billion, and averaging about $7,069; (5) FEMA purchased 727 flood-damaged properties at a cost of $21.4 million from fiscal year 1980 through January 12, 1988; (6) flood insurance claims from January 1978 through December 1986 exceeded available insurance by $88 million for buildings and $116 million for contents; and (7) average premiums for coastal high-hazard policies increased from $98 in 1978 to $437 in 1986.