WASHINGTON, Aug. 26 (UPI) -- The Federal Emergency Management Agency is seeking $19 billion in federal bailout funds to cover a flood insurance program observers call badly flawed.
"If this were a private insurer, it would be bankrupt," the president of the Insurance Information Institute, Robert Hartwig, said, USA Today reported Thursday.
Flood safety specialist David Conrad, an environmentalist with the National Wildlife Federation, said FEMA's flood insurance "does seem to fit Albert Einstein's definition of insanity -- to somehow expect something different when you do the same thing over and over again."
The program is flawed by a lack of political willpower to force homeowners repeatedly making claims to move or to elevate their homes, the newspaper said.
As a result, thousands of homeowners have received benefits that were many times over the value of their home. Owners of a home in Mississippi worth $69,900 have been awarded $663,000 in benefits since 1978 on 34 separate flood claims, the newspaper said.
The program also "artificially inflates the value" of older homes -- on average by $24,000 -- by providing discounts to owners of homes built before 1975, a FEMA report from 2006 says.
While the program losses an average of nearly $1 billion each year, "there's always been a few in Congress that have had enough political muscle" to keep rates low and restrictions loose, former FEMA Assistant Administrator David Maurstad said.
