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The intent was to reduce future flood damage through community floodplain management ordinances and provide protection for property owners against potential losses through an insurance mechanism that requires a premium to be paid for the protection. In 2003, the GAO found that repetitive-loss properties cost the program about $200 million annually.^[5]Congress originally intended that operating expenses and flood insurance claims be paid for through the premiums collected for flood insurance policies.^[6] NFIP borrows from the U.S. Treasury for times when losses are heavy, and these loans are paid back with interest.

Between 1978 and year-end 2014, the U.S. federal government has paid more than $51 billion in claims under the National Flood Insurance Program.^[7]