Rates charged to homeowners and businesses by the National Flood Insurance Program are based on an outdated computer model that doesn't accurately reflect the risk of loss, according to the Government Accountability Office.
GAO issued its report as the March 3 deadline to reauthorize the program looms, with the House and Senate so far unable to reconcile differences between the separate bills each body of Congress passed to extend and reform the NFIP–including a debate over whether to add coverage for wind exposures.
The GAO report said the Department of Homeland Security should direct the Federal Emergency Management Agency to take steps "to ensure that its rate-setting methods and the data it uses to set rates result in full-risk premium rates that accurately reflect the risk of losses from flooding." Specifically, these steps should include:
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