FEMA to Borrow $2B to Pay Flood Claims After Hurricanes Helene and Milton

The Federal Emergency Management Agency said it needs to borrow $2 billion from the U.S. Treasury to cover claims from National Flood Insurance Program policyholders.

FEMA, administrator of NFIP, said it expects to pay out more than $10 billion in flood claims related to hurricanes Helene and Milton in 2024 – as well as claims for other flooding events last year.

“The NFIP is not designed to pay for multiple catastrophic events in a single year without additional financial assistance,” FEMA said. “The combined losses from 2024 have depleted the NFIP’s funds generated from premiums to pay claims.”

More than 57,400 flood claims related to Hurricane Helene have been handled by the program, which has paid out more than $4.5 billion as of Feb. 6. It expects to pay losses from Helene of between $6.4 billion and $7.4 billion.

For Milton, the NFIP has so far paid out over $740 million as of Feb. 6 on over 21,100 claims. The range of final losses from Milton is estimated to be $1.2 billion to $2.9 billion, FEMA said.

Milton was a fourth quarter 2024 hurricane, striking Florida on Oct. 9. For the private insurance industry, Milton will go down as the costliest hurricane of the historic 2024 season, and the storm will likely be one of the costliest of all time. But Milton was more of a wind event than Helene, which made landfall at what is known as Florida’s Big Bend as a Category 4 in late-September before dumping record rainfall in Southeast states including Georgia, North Carolina, and South Carolina.

FEMA’s debt is now about $22.5 billion. It has the authority to borrow up to about $30.4 billion and already had borrowed $20.5 billion following hurricanes Katrina, Sandy and Harvey, FEMA said.

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

“The widespread, devastating flooding following hurricanes Helene and Milton reemphasizes the financial effects flooding can have not just to survivors but also the National Flood Insurance Program,” she said.