Where does my money for flood insurance coverage end up?
The flood insurance policy is a contract with the Federal Government through an insurance company. The Federal Government (FEMA) is the agency that pays claims due to weather related flood damage. Nationwide, FEMA has underwritten more than 5.4 million policies with annual collections of $2.5 billion. During Hurricane Katrina alone, the Federal Government paid out more than $15.6 billion in claims (more than 6 times their annual collection).
