A devastating 1965 hurricane led private insurers to lobby Congress to get into flood insurance. But that had a lot of unintended consequences.
- The greatest tidal surge in Louisiana history.
J DAVID ROGERS: 1965 was a watershed year because Hurricane Betsy made a direct hit on New Orleans. And that was the first billion dollar natural catastrophe in American history. The private insurers had just taken a huge loss on Betsy. They'd never had a as large a catastrophe before that they had to pay out on. So they wanted the government to come in and help people out on flood control in places like New Orleans.
They started trying to influence the Senate, Banking, and Finance committee at each congressional session from 1966, '67, and in '68 they finally got a positive vote for a federally funded insurance program. And the Corps of Engineers didn't want to have anything to do with it. And they were forced into the whole thing. And this was a much kinder, gentler type of system than the private insurance companies have because it was going to be partially helped by federal moneys.
The problem with it was land speculation. When the federal government comes in and says, we're going to make this place safer from flooding, everybody started buying up properties, especially in East New Orleans, which hadn't been developed previously because it was so prone to flooding. It was based on a lot of theoretical factors that didn't realistically look at what the probability of failure of levees is.
The 100-year flood is an overworked term that's hardly understood even by many people in the engineering community. It's supposed to mean It just has a 1% chance of recurrence. And if you really wanted to know what the 100-year flood was, you'd have to have 1,000 years of flow records. And we don't have that kind of data.
By the time we got to 2010, the National Flood Insurance Program was $17.5 billion in the red. So it doesn't bring in sufficient funds compared to what it's paying out. And it's a huge problem that needs overhauling.