WASHINGTON — For nearly 40 years, the federal government has made flood insurance available to property owners, filling a gap left by private carriers, which generally decline to write the coverage.

The program has grown controversial over the years. Critics have argued it encourages Americans to build on beaches, flood plains and other sites that shouldn't be built on — and wouldn't be if the government weren't willing to pay when such homes and vacation spots are washed away.

Nonetheless, as the New Orleans disaster illustrates, the insurance can be immensely valuable. Policies under the National Flood Insurance Program will pay up to $250,000 for residential buildings, plus an additional $100,000 for contents that are lost. They will also pay up to $500,000 for nonresidential buildings and $500,000 for their contents.

The premiums average around $400 a year for $100,000 of coverage. Many mortgage lenders require it, at least for property within a flood-prone area. Fannie Mae, for example, requires coverage of 80 percent of the replacement cost of the home, or the program limit of $250,000, whichever is less.

According to a recent study by the Center on Federal Financial Institutions, a nonprofit think tank, the federal flood-insurance program has about 4.6 million policies in place, covering more than $743 billion in assets. Annual premium collections run about $2 billion.

Still, the program is not as popular as you might expect.

"People don't buy insurance unless they have to, " said Douglas Elliott, the center's president. Also, he said, "I think there's been a certain fatalism, particularly on the coast of Mississippi [where just] one in four homes" is covered.

"That's just shocking to me, because it's cheap stuff," he said.

Federal flood insurance "is a greatly underbought product," said Robert Hunter, who once headed the program as federal insurance commissioner.

But Hunter, now insurance director at the Consumer Federation of America, said that while the program's penetration in Mississippi and Alabama mirrors national levels of 10 to 20 percent, it is much higher in New Orleans, covering perhaps half the houses there.

"New Orleans is an exception," he said.

Hunter and Elliott agreed that the program, though normally self-sustaining, will have to turn to Congress for help because of Katrina.

The recent study of the program put "

Elliott said that in the short run, the federal program may seek greatly increased borrowing authority to "give them time to decide whether to recoup [the losses] over time by raising premiums."

Premiums are lower than likely claims, he said, so policy-makers would need to choose between subsidizing the program with appropriated funds or having it raise premiums.

Many critics would prefer higher premiums. That's an easier sell when the insurance buyers are thought of as rich people who have built in a risky location to get a better view.

But New Orleans is different, Elliott said, "because many of the people most exposed there are poor," Elliott said.

Also, New Orleans is an old city where it is hard to argue people built in a flood plain because they could get cheap insurance.

But good policy or bad, property owners who face any risk of flood should look into the program. There are some restrictions, meant to encourage communities to take steps to ease flood risks, but coverage is available in most places.

Hunter said many communities have maps of their flood-prone areas, and some have put those maps online. The Federal Emergency Management Agency (FEMA), which administers the program, has maps on its Web site, though they aren't easy to understand.

The maps are a good guide to gauging your risk. Also, Hunter noted, premiums drop substantially for property outside flood-prone areas. Since floods sometimes exceed these boundaries, homeowners outside a flood-prone area may want to buy the coverage.

Besides the maps, information is available at FEMA's Web site, www.fema.gov. Click on "Mitigation and Flood Insurance."

Property owners can begin by checking to see if they already have coverage, or if they have enough.