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National Flood Insurance Program: New Processes Aided Hurricane Katrina Claims Handling, but FEMA's Oversight Should Be Improved
Date: December 2006
Institution: Government Accountability Office
Bibliographic Entry: National Flood Insurance Program: New Processes Aided Hurricane Katrina Claims Handling, But FEMA's Oversight Should Be Improved. Washington, DC: GAO, December 15, 2006. http://www.gao.gov/cgi-bin/getrpt?GAO-07-169 (Accessed 31 January 2007).
Electronic Link: http://www.gao.gov/cgi-bin/getrpt?GAO-07-169
Key Words: National Flood Insurance Program (NFIP), Hurricane Katrina, Hurricane Rita, insurance claims
Summary of Key Points, Issues, Conclusions:
The National Flood Insurance Program (NFIP) paid an unprecedented amount of claims in the aftermath of Hurricanes Katrina and Rita. FEMA and its private sector partners faced several challenges in processing a record number of flood claims from Hurricanes Katrina and Rita, among them were (1) reaching insured properties in a timely way because of blocked roadways and flood water contamination and (2) identifying badly damaged homes to be inspected in locations where street signs had washed away. Despite these and other obstacles, FEMA reported that over 95 percent of Gulf Coast claims had been closed by May 2006.
To provide oversight of the claims adjustment process, FEMA’s program contractor did quality assurance reinspections of Hurricane Katrina and Rita claims adjustments. FEMA did not adopt GAO’s October 2005 recommendation that it select the claims to be reinspected from a random sample of the universe of all closed claims; thus, the results of the reinspections cannot be projected to a universe larger than the 4,316 claims adjustments that were reinspected. FEMA agrees with GAO’s prior recommendation and plans to do quality reinspections in future flood events based on a random sample of all claims. FEMA did not analyze the overall results of the quality reinspections for Hurricanes Katrina and Rita.
FEMA has made progress but has not fully implemented the NFIP program changes mandated by the Flood Insurance Reform Act. For example, 15 states had adopted minimum education and training requirements for insurance agents who sell NFIP policies, as of October 2006
Name of Researcher: Courtney Weigand
Institution: Integrative Center for Homeland Security, Texas A&M University
Date Posted: February 8, 2007