Congress Seeks To Extend National Flood Insurance Program
Congress hopes to introduce legislation to once again extend the National Flood Insurance Program, which is set to expire September 30. There have been different attempts to reauthorize the program for over a year now but all ended in failure unfortunately.
“This extension is just a temporary fix, but it is a significant and welcome development for millions of homeowners and small businesses who count on the NFIP for protection in the event of flooding,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs. “If the NFIP is allowed to expire, millions of consumers would be left vulnerable the next time a flood devastates a community.”
Both parties have yet to come to any sort of long term consensus over the future of the program. In the past the major hurdles to reauthorization were attempts to include wind coverage and whether or not to forgive the billions in debt the program owes to the Treasury.
Private insurers have begun to shy away from the wind coverage market due to the outcome of some court battles in the wind vs. water argument in the wake of the Katrina disaster. Most of the losses built up by FEMA, which runs the program were due in no small part to the same storm.
There’s no question the program plays an important role with the lack of a private market in place but even the Government Accounting Office has questioned FEMA’s rate setting processes and believe that premiums are too low. This places an extra burden on taxpayers which don’t live in flood prone areas as well as promotes irresponsible development of those areas.
This will now be the third such six month extension since the original program was set to expire last year. Hopefully the next Congressional session will be more successful in agreeing to a longer term solution to the program’s many faults.
