National Flood Insurance Program

Greater Transparency and Oversight of Wind and Flood Damage Determinations Are Needed

Disputes between policyholders and insurers after the 2005 hurricane season highlighted the challenges in understanding the cause and extent of damages when properties are subjected to both high winds and flooding.

Questions remain over the adequacy of steps taken by the Federal Emergency Management Agency (FEMA) to ensure that claims paid by the National Flood Insurance Program (NFIP) cover only those damages caused by flooding.

The Government Accountability Office (GAO) recommended granting FEMA authority to obtain available write-your-own (WYO) insurer wind damage claims data for properties subjected to both high winds and flooding and WYO insurers' guidance to adjusters for making such damage determinations.

Further, GAO recommended that states enhance the quality and consistency of adjuster oversight. FEMA agreed with GAO's recommendation to enhance adjuster oversight but did not agree that Congress should grant it enhanced authority to access WYO insurers' wind claims data and adjuster guidance.