The US National Flood Insurance Program – which has often been held up as a model for an Australia-wide flood insurance scheme – is bankrupt. Now the US Senate Banking Committee is trying to save the program by eliminating subsidies, strengthening cover requirements, redrawing flood maps and raising premiums.

The committee voted on the overhaul to save the bankrupt program in time for the forthcoming hurricane season. The legislation is being put before the Senate for consideration.

New flood maps will mark the remodelling of the program, and a more accurate pricing schedule will be used. All debt accrued during last year’s hurricane season will be abolished. Claims from the season overdrew from the program’s available resources and the borrowing authority rose to above $US20 billion ($26.4 billion).

The bill will raise the annual premium increase for the program from 10% to 15%, and all state-chartered financial institutions will be subject to the same requirements as federal institutions.