MYTH: As taxpayers, we all pay for natural catastrophes already through federal programs such as FEMA, so we might as well have government catastrophe insurance funds.

REALITY: Insurers pay the vast majority of homeowners’ catastrophe losses. The bulk of government disaster assistance from FEMA goes to public infrastructure and local governments, not individuals.

• After disasters, insurance payments and federal allocations have different purposes. (more...)
• A comparison of FEMA and private market insurance payments for U.S. hurricanes from 1994 through 2006 shows insurers paid out more than $100 billion while FEMA paid a little more than $33.1 billion in relief to public entities and only $16.3 billion to individuals. (more...)
• Additionally, a comparison of FEMA and private market insurance payments for U.S. earthquakes from 1994 through 2006 reveals insurers paid out $17.3 billion while FEMA paid out $205 million in relief to public entities and about $86 million to individuals. (more...)
• A graphic analysis of federal funding related to Hurricane Katrina compared to private insurance further illustrates where government funds are actually spent. (more...)