First the good news: The National Flood Insurance Program (NFIP) isn't dead yet. Facing expiration unless Congress acted by the end of September, the NFIP was renewed as part of an emergency $15-billion aid package in the wake of Hurricane Harvey and Hurricane Irma. The last-minute cash infusion was needed to keep the Federal Emergency Management Agency (FEMA) operating after the back-to-back major hurricanes threatened to drain the agency's pocketbook in a matter of weeks.

Now the bad news: the NFIP extension is short-term: just like the increase in the US Treasury's borrowing authority that was attached to the emergency hurricane relief bill in a surprise compromise between President Donald Trump and Congressional Democrats, the NFIP's reprieve expires on December 8th. The Insurance Journal has that story (see: "National Flood Insurance Program Extended Until Dec. 8"). Insurance companies aren't excited: "Congress has had five years since the last reauthorization to reform the NFIP, and the problems facing the program have been starkly evident since at least the 2005 storm season,” pointed out Jimi Grande, senior vice president of Government Affairs, for the National Association of Mutual Insurance Companies.

Now for the really bad news: 2017 is going to be the NFIP's worst year ever. The program never managed to get back to break-even status after its previous worst year, 2005, when it ran through its reserves and needed a Federal money infusion following a six-hurricane year that included the hugely destructive and deadly Hurricane Katrina. The Weather Channel has this recap of thZe 2005 season (see: "2005's Record-Breaking Hurricane Season: By the Numbers"). But 2017 is shaping up to be even worse than 2005. CNN-Money has the story here (see: "Harvey, Irma deliver one-two punch to battered flood insurance program," by Chris Isidore). "Enki Research, a disaster analysis company, estimated Monday evening that Harvey will result in $16 billion in claims against the flood insurance program and Irma will cost the program an additional $12 billion," CNN-Money reported. "Together the two storms would top the $20.7 billion in claims from Katrina, and be more than triple the nearly $9 billion in claims from Sandy, the second biggest hit to the program until now."

The NFIP has nowhere near that much money on hand, CNN Money reported: "It has less than $2 billion cash on hand, with the authority to borrow only $6 billion more... Reinsurance policies purchased by FEMA could cover about $1 billion, a small fraction of what the program will need."

And keep in mind: Most homes that flooded in Harvey and Irma — and this is before Hurricane Maria blasted Puerto Rico last week — were not even covered by any flood insurance at all. The Washington Post took a look at the numbers in an August 29 story (see: "Where Harvey is hitting hardest, 80 percent lack flood insurance," by Heather Long). "Only 17 percent of homeowners in the eight counties most directly affected by Harvey have flood insurance policies, according to a Washington Post analysis of Federal Emergency Management Agency data," the paper reported. "Everyone else who loses their home to flooding will be dependent on private charity and government aid, especially grants from Federal Emergency Management Agency. But FEMA's help is a poor substitute for flood insurance: The grants, intended to help residents rebuild homes and cover hotel stays until permanent housing is available, are capped at $33,300. Most receive significantly less."

If a home in FEMA's designated flood hazard zone has a mortgage, regulations require the mortgage lender to insist on a flood insurance policy. But those rules aren't well enforced, Bloomberg reported recently (see: "Hurricanes Highlight Failure to Enforce Flood Insurance Rules," by Christopher Flavelle). "In Florida, FEMA estimated in 2015 that as many as 43 percent of those required to have coverage didn’t," Bloomberg reported. While the insurance is typically in force at the time of the loan, it's common for homeowners to let their policies lapse, and for nobody to enforce the requirement over the years. "Just two years ago, the Federal Emergency Management Agency estimated that as few as half of the 1.5 million residential structures required to carry flood insurance actually do," reported Bloomberg. "It can’t be sure, though: FEMA isn’t responsible for tracking that kind of data—nor is any other agency."