Reforms to US Disaster Aid Expose Growing Home Insurance Gap
As storms, floods and fires exert a heavy toll, Americans lack adequate insurance and depend on government help to recover.
A home damaged by flooding in Waterbury, Vermont, in December 2023.
Photographer: Shelby Knowles/BloombergWhen disaster hits in the US, the federal government gives aid to states and counties, but also to individuals. In 2022, the Federal Emergency Management Agency delivered $3.25 billion to nearly 1.4 million households recovering from damaging floods and fires. The aid money helps cover things as large as home repairs and as small as diapers, drinking water, food and other necessities.
This aid regime was created by Congress: The Stafford Act of 1988 threw a lifeline to Americans who were not covered by private insurance, a group assumed to be small. But that can no longer be taken for granted. Insurance rates are rising as costly disasters become more frequent, and with more and more people living in higher-risk areas such as coastal Florida and wildfire-prone parts of the West. Insurance companies are now stepping back from some markets. Just earlier this week, The Hartford announced it would become the latest major insurer to stop writing new policies in California.