MYTH: The federal government can help states lower the cost of homeowners insurance by adding wind coverage to the national flood insurance program and providing the states with government reinsurance and low interest loans.

REALITY: Government proposals that transfer risk from insurers to taxpayers won’t reduce the risk or cost, but will diminish the private market and encourage further development in hazardous areas leading to increased risk and cost in the future.

• Spreading the risk of natural catastrophes to the private sector, rather than using debt to finance risk in federal and state insurance programs, is the best long-term solution to addressing catastrophe exposures and cost issues. (more...)
• A federal fund that sells reinsurance to state catastrophe funds concentrates all of the risk associated with natural disaster in government. (more...)
• There is no assurance that a federal reinsurance program or low interest loans for the states will result in more affordable or available homeowners insurance. (more...)
• The National Flood Insurance Program, NFIP, is a program already struggling with an inadequate cash flow and $17.5 billion in debt. (more...)
• According to the Federal Emergency Management Agency, FEMA, only about 49 percent of single-family homes in special flood hazard areas nationwide are covered by NFIP. (more...)