Fema borrows $2bn from US Treasury to cover NFIP claims

By Mia MacGregor

Feb 11 - (The Insurer) - The Federal Emergency Management Agency (Fema) has exercised its borrowing authority under the National Flood Insurance Act of 1968, securing $2bn from the US Treasury to pay eligible National Flood Insurance Program (NFIP) claims.

The borrowing follows a series of large-scale flooding events in 2024. While NFIP premiums typically cover claims in non-catastrophic years, extreme weather events in 2024 including hurricanes Helene and Milton caused widespread damage and triggered thousands of flood insurance claims, Fema reported.

As of 6 February 2025, Hurricane Helene has resulted in over 57,400 flood insurance claims totalling more than $4.5bn. Fema estimates that total losses for the NFIP will range between $6.4bn and $7.4bn.

Meanwhile, Hurricane Milton has generated over 21,100 flood insurance claims totalling $740mn, with projected NFIP losses ranging between $1.2bn and $2.9bn, according to Fema.

The agency noted that the combined losses from 2024 have depleted the NFIP’s funds generated from premiums to pay claims.

Fema’s borrowing authority stands at $30.425bn, of which $20.525bn was previously borrowed following hurricanes Katrina, Sandy and Harvey.

“We are strategically utilising short-term borrowings in 60-day increments, demonstrating our careful and responsible management of the borrowing authority,” said Elizabeth Asche, senior executive of the NFIP.

“Despite these challenges, the NFIP remains unwavering in its commitment to fully pay every claim and ensure policyholders receive the compensation they are owed for eligible flood-related losses,” Asche added.