The property has a flood insurance policy through the National Flood Insurance Program, a Federal Emergency Management Agency spokesperson told HuffPost. The program provides affordable insurance in flood-prone zones where private insurers have traditionally refused to insure properties because they’re so vulnerable.
The Mar-a-Lago club’s policy, which is insured to the Trump Organization and Donald J. Trump Revocable Trust, is not subsidized and is classified at a full-risk rate for the applicable flood zone, the FEMA spokesperson said.
A property covered at the “full-risk” rate means that its owner is paying a rate that reflects the full risk of flooding up to a certain coverage amount. Older properties can be “subsidized,” meaning their rates do not necessarily reflect the full risk for those properties. The 1968-era National Flood Insurance Program, or NFIP, offers a mix of rates.
The insurance program’s authorization was set to expire at the end of this month, but Trump signed legislation on Friday that temporarily extends it.
NFIP as a whole has been criticized for not charging enough to cover the expected costs of liabilities. It also consistently does not bring in enough money to pay out the properties it insures, and owes around $25 billion to the U.S. Treasury. Based on policies that went into effect on Aug. 31, 2016, the program is projected to have a one-year shortfall of $1.4 billion, according to a Congressional Budget Office report published this month.
Some critics say the program benefits affluent people who live on beachfront property, essentially allowing them to live in places that are at a high risk of being damaged.
“If [NFIP] was a regular insurance company, they would have been in receivership,” Burl Daniel, an insurance expert witness from Texas, told HuffPost. “But it’s a political football because of the people who live on the coast.”
“The program was already in trouble” before Hurricanes Harvey and Irma began approaching the U.S., said Karen O’Neill, an associate professor at Rutgers University who studies how policies about land and water affect government power.