Protecting People, Property and Our Way of Life
Senators push to renew flood insurance program
April 21, 2017
By: Keith Magill, DailyComet.com
The National Flood Insurance Program, set to expire Sept. 30, is the sole source of flood insurance for more than 5 million homes and businesses across the U.S.
U.S. senators from Louisiana and other Gulf Coast states are urging congressional leaders to make federal flood insurance renewal a top priority.
“Given the program’s importance to our states, we urge Senate leadership to ensure that legislation reauthorizing the NFIP avoids any lapses in coverage and offers a long-term solution that promotes certainty in the market,” the senators say in their letter.
It is signed by Sens. Bill Cassidy and John Kennedy, both R-La.; Marco Rubio, R-Fla.; Thad Cochran, R-Miss.; and Bill Nelson, D-Fla. Dated Thursday, it was sent to Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y.
The National Flood Insurance Program, set to expire Sept. 30, is the sole source of flood insurance for more than 5 million homes and businesses across the U.S. As of Feb. 28, it covered about 16,400 homes in Terrebonne and 12,400 in Lafourche with a combined value of roughly $7 billion.
Banks and other lenders require homeowners with mortgages in much of Terrebonne and Lafourche to have the coverage, specifically homes within the so-called “100-year floodplain.” The National Flood Insurance Program defines those areas as high risk, with a 1 percent or greater chance of flooding in any given year. That translates to a 26 percent chance of flooding during a 30-year mortgage.
Local officials have long advised everyone in both parishes to obtain flood insurance — regardless of whether your lender says you need it — because of the significant risk of flooding from rain, tides and Gulf of Mexico storms.
Congress has patched the program with short-term renewals more than a dozen times since 2008 and let it lapse for about a month in 2010.
“When the NFIP expired in 2010, over 1,300 home sales were disrupted every day as a result,” National Association of Realtors President William E. Brown said in a news release March 30. “That’s over 40,000 every month. Flood insurance is required for a mortgage in the 100-year floodplain, but without access to the NFIP, buyers simply couldn’t get a mortgage or vital protection from the No. 1 cause of loss of property and life: flooding.”
Congress is also considering reforms to the program, which critics say keeps rates artificially low and encourages people to live in harm’s way at taxpayers’ expense. The imbalance, coupled with payment of massive claims for disasters such as hurricanes Katrina, Sandy and Matthew as well as last summer’s Louisiana floods, have left the program an estimated $24.6 billion in debt.
For years, Congress has debated whether to bring insurance costs more in line with the actual risk of flooding, something that has threatened to make policies unaffordable for many residents across south Louisiana and elsewhere in the U.S.
“Should the Senate consider legislation beyond a clean reauthorization of the NFIP, we would also welcome beneficial and sound reforms to the program,” the senators say in their letter.
Specifically, the senators say they support reforms that would:
- Ensure home and business owners can afford policies.
- Encourage private insurance companies to offer policies “with robust consumer protections and safeguards against adverse selection.”
- Improve customer service for policyholders.
- Use more-accurate flood maps based on the latest data to determine rates, and create a more-effective process for community involvement and appeals in adopting those maps.