n Friday, the Federal Emergency Management Agency announced an initial estimate of Hurricane Ian losses for the National Flood Insurance Program, putting them in the range of $3.5-$5.3 billion, including loss adjustment expenses.
The losses include flood insurance claims received from five states, with the majority of claims coming from Florida, FEMA said.
As of Nov. 10, NFIP had received more than 44,000 flood claims from Hurricane Ian, paying nearly $437 million to policyholders.
FEMA said it based the initial estimate on several data points, including policy information, daily reports of claims and payments made, significant historical events patterns of reported claims and payments, current economic conditions and claim adjuster observations.
FEMA will continue to update models and confirm future estimates as the claims process evolves.
NFIP flood insurance claims are paid from the National Flood Insurance Fund and Reserve Fund. The program also has the ability to borrow an additional $9.9 billion in funds, FEMA said.
Providing details of the reinsurance program for NFIP, FEMA said the program
- Includes an annual traditional reinsurance program with a $4 billion or more trigger for a percentage of recovery payments
- Three capital market placements with a recovery payment beginning at $5.32 billion in received claims payments.
To collect the maximum reinsurance amount, NFIP would need to incur at least $10 billion in flood insurance claims losses, FEMA said.
FEMA currently holds roughly $2.5 billion of reinsurance coverage for fiscal year 2022. If a covered flood event results in NFIP claim payouts that equal or exceed an agreed upon amount, then reinsurers agree to pay a certain percentage.
SOURCE: Federal Emergency Management Agency
Photo: Water floods a damaged trailer park in Fort Myers, Florida after Hurricane Ian passed by the area. (AP Photo/Steve Helber)
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