Realtors and other groups are rushing lawmakers to reauthorize the nation’s federal flood insurance program to avoid any unnecessary economic hardships before the program expires in six months.
Congress’ last attempt to reauthorize the National Flood Insurance Program resulted in a two-year song and dance of five lapses and 18 short-term extensions—a hindrance for businesses depending on the program—before Congress passed the 2012 Biggert-Waters Flood Insurance Reform Act.
Ahead of the program’s Sept. 30 expiration date, lawmakers have set an assortment of lofty goals about wanting to once again make major revisions to the program’s fatally-flawed structure that has landed it $24.6 billion in debt.
“When the NFIP expired in 2010, over 1,300 home sales were disrupted every day as a result. That’s over 40,000 every month,” William Brown, president of the National Association of Realtors (NAR), said in a March 30 press release.
“Flood insurance is required for a mortgage in the 100-year floodplain [high-flood-risk area], 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,” Brown said in the release.
The SmarterSafer Coalition—Insurers, environmental groups, taxpayer advocates, housing groups and others—is pushing for changes that spur greater private sector participation in the flood insurance market and steer the program toward rates that better reflect the risk to insure properties.
“NFIP and disaster assistance provide important benefits; however these programs have not done enough to mitigate risk and must be significantly reformed to achieve a safer future for our Nation,” the SmarterSafer Coalition told members of two congressional panels with primary NFIP jurisdiction in a letter obtained by Bloomberg BNA. “Any reforms must ensure that the federal government is not encouraging development in risky or environmentally sensitive areas.”
SmarterSafer’s insurance and reinsurance members include The Chubb Corporation, Liberty Mutual Group, SwissRe and USAA. They’re allied with Zurich.
The group pointed out that 78 percent of NFIP subsidies go to homes in the wealthiest counties, according to the Government Accountability Office, underscoring a point some lawmakers have raised at reauthorization meetings that one of the costliest parts of the NFIP is saving people money that could probably afford to pay flood insurance rates that match the cost of the coverage.
In fact, SmarterSafer is trying to bat down legislation that would expand taxpayers’ risk to wealthy properties, according to the letter.
Under the Flood Insurance Fairness Act, “taxpayers would provide additional subsidies for vacation properties and other high cost properties—which would be highly unfair to American taxpayers without flood insurance and even those within the flood program who could be forced to cross-subsidize these homes.”
The bill would lift restrictions on the program’s ability to subsidize rates for people’s second homes and on any business.
Meanwhile, insurers have recently told lawmakers they need more access to FEMA’s rate-setting information so they can better assess their risk in offering private flood insurance coverage.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)