Michael D. Brown, National Flood Insurance Program

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This is a partial transcript from Your World with Neil Cavuto, June 30, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Are you living in a home not insured for flood (search) damage? If so, my next guest says you might be in trouble, but you’re certainly not alone.

Joining us from Washington is Michael D. Brown, the guy who oversees the National Flood Insurance Program.

Secretary, thank you for coming.


CAVUTO: First off, you know, the government, you know, wants to make sure the people who are damaged in flood-prone areas have protection in flood-prone areas, but a lot of insurance companies are balking at providing coverage in flood areas.

What’s the problem right now, Secretary? Is it a serious issue?

BROWN: It’s a very serious issue, and homeowners’ policies will not cover flood damage.

So that’s why in 1968, Congress established the National Flood Insurance Program, and it’s really an insurance program as a second resort that folks can buy into to protect their homes from flooding.

The key point, though, that I want to remind people -- as they watched your reports about the flooding that we’re expecting throughout the Southeast -- is that you must have that policy in place 30 days before it becomes effective.

CAVUTO: So that’s kind of interesting. For people who are now just looking at the rain and saying, gee, I better get insurance, it’s too late for them.

BROWN: Well, it may be too late for any flooding that might occur right now, but they still need to get that flood insurance program policy and get it into place because there will be flooding continuing throughout the summer.

As one of your reporters mentioned earlier, there’s been a forecast of a lot of hurricanes this season, and I think Tropical Storm Bill is a good indicator of just what we’re in for this year.

CAVUTO: Secretary, you know, a lot of people live in flood zones, but where the government makes a distinction here if you are in violation of federal standards or your community is.

What does that mean? If you’re in a high-risk area that, no matter what happens, you’re not going to get coverage?

BROWN: Well, no. And studies have shown that whether they’re in a high-risk area or not, if they comply with the standards of the National Flood Insurance Program, generally, the damages to their homes are 80-percent less than they normally would be.

So adhering to those standards really does save both the individual and the American taxpayer a lot of money in the long run.

CAVUTO: All right. Now, for this area, they had a bad series of floods in the Brisbane, Louisiana, area in 1974. That left about 8,000 people homeless. In today’s dollars, that cost $328 million.

Do you think this particular storm or hurricane, whatever it ultimately becomes, will be similarly damaging?

BROWN: Well, it very easily could, and we often forget, just a year or two ago, we had Tropical Storm Allison which hit Houston, which was one of the largest presidentially-declared disasters in American history.

That’s where we thought we were going to have a huge hurricane, but, instead, the tropical storm came on up to the coast and then stalled out and just rained for days and days.

As the reporter said earlier, the Southeast is already saturated with water, so we’ve already activated our regional operations centers. We’re already geared up for the inland flooding which we think may be the most potentially dangerous aspect of the storm.

CAVUTO: Secretary, if you don’t mind, this isn’t your bailiwick, but the Louisiana offshore oil port halted the off loading of crude earlier today because of the storm. That’s to sort of check financial damage from this early on, is it not?

BROWN: Well, it absolutely is, and it’s also good. It shows that, no matter how large or small we think the storm is, you don’t know the track they’ll take necessarily and you don’t know whether they’ll grow or not.

The water temperatures are so warm right now, the storm could just slow down and then grow even larger. So I would say the oil companies are being very prudent in that regard.

CAVUTO: Well, Secretary, you’re a busy fellow. We’ll let you go. All right. Appreciate it, sir, very much.

Michael Brown out of Washington.

BROWN: Thank you, Neil.

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