The National Flood Insurance Program is up to its ears in a flood of red ink, owing billions of dollars to the U.S. government. Much of that debt dates back to federal bail-outs of the program after two bad years, including 2005 (when Hurricane Katrina overwhelmed the program's cash reserves).
But not all the program's trouble can be traced to a couple of exceptional disasters. Year in and year out, the NFIP runs up a tab paying to repair houses that flood in routine disasters. In fact, a substantial fraction of the program's outlays over the years have been for payouts on houses that flood again and again and again.
Case in point: the house at 48 Oceanside Drive in Scituate, Massachusetts. Beth Daley of the New England Center for Investigative Reporting writes in the Boston Globe: "Over and over again, the Atlantic has taken aim at 48 Oceanside Drive. Almost four decades ago, it slammed the house clear off its foundation. Thirteen years later, seawater poured through the roof during a nor'easter. So often has the sea catapulted grapefruit-sized rocks through the vacation home's windows that a former owner installed bulletproof-glass. At least nine times the property has sustained significant flood damage from coastal storms. And each time, the federal government helped owners rebuild with National Flood Insurance Program payouts." (For the full report, see: "Houses wrecked repeatedly by sea rebuilt with taxes," by Beth Daley.)
The program granted $40,000 to elevate the house in 2005; now, the current owner is applying for another grant to lift the house up again. A former owner who sold in 1991 says, "We always knew it was unsustainable there."
And this house, of course, is not the only case: similar examples abound along the coast. Writes the Globe: "Scituate has 112 of them. Over the years, such properties have accounted for 689 losses. The total in claims: $21.3 million."