Some areas that flooded were not designated as being at risk of flooding on the federal flood zone maps. Therefore insurance was not required by lenders. The feds are currently redrawing the flood zone maps.
I am living in a trailer (not FEMA).My house got about 5 feet of water from Katrina. (My house is 11 feet above sea level.) State Farm paid off my insurance claim within about 6 weeks. I have paid off my mortgage and will rebuild a raised house that will put me ca 18 feet above sea level. The house will be built to comply with the new wind load codes.
I am staying here because I love living here. Most people in my neighborhood have not been heavily financially damaged if they had decent insurance because real estate values have remained strong. I own a condo in New Orleans that did not flood. It has appreciated in value by 50% since Katrina.
This area will survive and flourish again, but not because of handouts from the federal government. FEMA has been extremely inept and wasteful. (FEMA is spending $500 dollars per trailer just to build wooden steps with handrails.) I could go on and on. If you are counting on FEMA to be able to respond to the aftermath of a major terrorist attack, you should be very very worried. I am also tired of Federally subsidized stupidity and it begins with federal stupidity. Once again, our government has disregarded free market principles and blundered into an enormous boondoggle without regard for the eventual consequences.