There has always been an inherent conflict of interest in private insurance companies settling claims for the National Flood Insurance Program. It has also been difficult to define fair compensation for privately provided services for the NFIP in a manner that is consistent with the federal government's duty to make sure costs are minimized for the benefit of taxpayers who subsidize the program.
Because of serious problems with both claims and fees, private insurers were removed from the NFIP in the 1970s. (See sidebar for a brief history of these issues.)
Awareness of these earlier problems is important because it shows the issues plaguing the NFIP today are endemic and long-lasting–not unique to the aftermath of Hurricane Katrina.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.