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Federal Flood Insurance Exists Because Private Insurers Wanted Out

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Posted at 8:12 AM, Apr 29, 2021
and last updated 2021-04-29 08:12:30-04

NEW ORLEANS, La. — A devastating 1965 hurricane led private insurers to lobby Congress to get into flood insurance. But that had a lot of unintended consequences.

Hurricane Betsy made landfall along the Gulf of Mexico in 1965 as a Category 4 storm. More than 80 people died, power and telecommunications were knocked out region-wide and levees along Lake Ponchartrain breached to flood New Orleans.

The impact of Betsy went well beyond lives and property lost, though. As the first U.S. hurricane to cause more than $1 billion in damage, it would reshape flood policy for generations.

Private insurers had largely not offered flood protection for decades following previous devastating floods in 1927, and lawmakers had been considering how to offer affordable flood insurance for years. Private insurers also lobbied Congress for three years to establish federal flood insurance, and in 1968, lawmakers agreed.

This story was originally published by Cliff Judy at Newsy.