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PolitiFact Florida | Tampa Bay Times
Sorting out the truth in state politics

PolitiFact: Floridians — and others — give more than they get from flood program

The statement

"Over the past 35 years, Florida families have paid into the (National Flood Insurance Program) over $16 billion, four times more than the amount they have received in claim reimbursements."

Gov. Rick Scott, in a letter to Florida's U.S. senators

The ruling

The National Flood Insurance Program, run by the Federal Emergency Management Agency, started in 1968. More than 5 million property owners nationwide hold flood insurance, and about 20 percent are subsidized.

After the 2005 storm season — which included Hurricane Katrina — the program became indebted to the U.S. Treasury. As of May 2013, it owed about $24 billion.

Florida's Office of Insurance Regulation directed us to an issue brief written by the University of Pennsylvania Wharton Center for Risk Management and Decision Processes.

The 2010 study showed that in some states, policyholders paid far more in premiums than they collected in claims between 1978 and 2008 — a 30-year stretch. (That's five years fewer than Scott claimed, but as we'll see, the numbers likely hold true through 2013, for a total of 35 years.)

In Florida, "policyholders paid $16.1 billion in premiums but collected only $4.5 billion in claims reimbursements: that is, premiums paid over time were about 3.6 times the insurance reimbursements," according to the study.

Florida wasn't alone in paying more into the program than receiving back in claims. Thirteen states had an even higher ratio, and Colorado was the highest. (Florida was tied for 14th with Montana.)

"The situation is reversed in Texas, where flood insurance policyholders paid $4.5 billion in premiums but collected a larger $6.7 billion in claims," the study states.

The study was based on data from the flood insurance program, so we went directly to the program and FEMA to check the data ourselves. We found fairly similar numbers to the Wharton study.

The author of the Wharton study, Erwann Michel-Kerjan, told PolitiFact that his figure of $4.5 billion for claims in Florida through 2008 was higher than FEMA's of $3.7 billion through mid 2013 because he accounted for inflation. Also, it's worth noting that many of our big storms were in 2005-20006, not in more recent years. So the trend in payments from 1978 to 2008 likely continues today.

The only key point Scott omits is that this imbalance is common: Lots of states pay more in premiums than they receive in claims.

We rate this claim Mostly True.

Edited for print. Read the full version at

PolitiFact: Floridians — and others — give more than they get from flood program 10/04/13 [Last modified: Friday, October 4, 2013 6:30pm]
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