Reform and reauthorize Flood Insurance Program now

And floods do come. Last year, Hurricanes Irene and Lee caused significant flooding from North Carolina to Maine. Those storms followed significant spring flooding in several states across the country. Responding to these events, the NFIP paid out nearly $1.8 billion in claims. These payments are lifelines. They help homeowners get back in their homes and small businesses to re-open. The NFIP helps communities and families rebound from the devastating impact of flooding. 

{mosads}Without flood insurance many residential and commercial real estate transactions in federally-designated floodplains across the country will come to a complete stop, because federally backed mortgage loans cannot legally be secured without this protection. According to the National Association of Realtors, nearly 40,000 mortgage closings per month would be jeopardized.

Clearly, at a time when America’s economy and particularly the housing market continue to struggle, the nation cannot afford yet another lapse of the program. 

The NFIP needs reform in addition to long-term certainty. To that end, the American Insurance Association (AIA) and its many allies continue to advocate legislation that would add certainty to the program and move the NFIP toward a more sound financial position.

Two proposals currently before Congress would achieve these goals by reauthorizing the NFIP for five years and make reforms that would put the program on the path toward solid financial footing. In fact, the House of Representatives passed the Flood Insurance Reform Act of 2011 (H.R. 1309), by an overwhelming vote of 406 to 22. Last September, the Senate Banking Committee unanimously approved the Flood Insurance Reform and Modernization Act of 2011 (S. 1940).

Few items in this Congress have attracted such bipartisan support. A broad coalition of insurance companies, environmental groups and taxpayer advocates agree that it is time to end the cycle of short-term extensions and finally guarantee that flood insurance will be available to communities in flood prone areas.

Congress can and should act now to reform and reauthorize the NFIP before it lapses yet again. Our economy, our communities and the NFIP’s millions policyholders deserve action. Waiting until hurricane season begins would be too late.
 
Pusey is the president and chief executive officer of the American Insurance Association.