Confusion in southeastern Minnesota about flood insurance

Gov. Tim Pawlenty wants to require insurance companies to tell Minnesotans about their eligibility for flood insurance. His proposal comes on the heels of some confusion in southeastern Minnesota about flood insurance.

In the meantime, Congress has shown little enthusiasm for taking the unpopular steps that experts say are necessary to fix the nation's main flood insurance program -- despite promising changes.

The recent flooding in Minnesota and other Midwestern states has brought the issue back to the forefront, but there were many problems with the program when hurricanes Katrina and Rita hit in 2005.

The needs that arose from those storms dispelled any notion that the insurance program was self-sustaining. They threw it roughly $20 billion into debt and called attention to major structural flaws.

Nearly everyone acknowledges the insurance program can't pay off the debt, much less pay for losses in future storms. But so far, Congress has done little more than raise the program's borrowing limit, essentially handing taxpayers a series of shaky IOUs.

A failure to act could leave the public vulnerable to large bailouts of the program. It could also help perpetuate a false confidence among some property owners that they do not need coverage.

(The Associated Press contributed to this report)

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