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Reforming the National Flood Insurance Program

floodingSenator Cindy Hyde-Smith is proposing an update to the National Flood Insurance Program (NFIP). Hyde-Smith’s proposal aims to address the multiple extensions the NFIP has undergone with a long-term extension plan. Hyde-Smith is a lead cosponsor of the National Flood Insurance Program Reauthorization and Reform Act or NFIP-RE Act

“We’re trying to flip the script on mitigation projects, from being reactionary to being proactive.  This is the first bill that provides a significant amount of real money for pre-disaster mitigation, which would give taxpayers a better return on investment.  It is far more expensive to rebuild after a disaster than it is to do everything you can to protect yourself beforehand,” Hyde-Smith said in a statement.

In her letter to Senate Banking Committee Chairman Michael Crapo and Ranking Member Sherrod Brown, Hyde-Smith puts forth several options to address affordability issues among low and middle-income policy holders and debt issues within the NFIP. 

Through the NFIP-RE Act, Hyde-Smith suggests a new community mapping appeals process regarding flood maps created by the Federal Emergency Management Agency (FEMA) for states, local governments, or property owners, as well as a direction to FEMA to factor nonfederal flood control structures, like levees, when determining flood risk zone designations.

Additionally, the bill would increase NFIP participation among homeowners and small businesses by capping the premium rate increases to 9%.  Under the current system, rates can rise up to 25% annually in perpetuity. 

“Runaway premium hikes under the current system undermine and weaken the flood insurance program, which increases the burden on taxpayers to pay for federal disaster assistance to cover uninsured losses,” Hyde-Smith said.  “There’s no point in having flood insurance if nobody can afford it. This bill would help meet the equally important goals of solvency and affordability.”

The bill also includes reforms to tackle agency mismanagement, unsustainable debt service costs and contractor profiteering.

Hyde-Smith’s letter to the Senate Banking Committee can be found here.

About Author: Seth Welborn

Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer.
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