6/14/2011 - Report: National Flood Insurance Program policyholders are saving money
According to the Property Casualty Insurers Association of America, policyholders in the NFIP are paying approximately one-half of the true risk cost. Furthermore, the study found people in higher risk flood zones are paying as little as one-third of the true cost.
The report finds that the Federal Emergency Management Agency, the organization that administers the government-funded program, bases rates on annual administrative and cash-flow losses, while private insurers that don't participate in the program determine premiums through various risk assessments.
FEMA recently expanded the number of communities with flood zones, but the record levels of flooding which have occurred over the past month may lead to more communities participating in the program.
You can find out more about the NFIP by visiting here.