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How to Improve the NFIP

floodingCongress has until September 30 to reauthorize the National Flood Insurance Program (NFIP), and according to Craig Poulton, CEO of Poulton Associates, LLC, the NFIP has caused plenty of harm as it funds subsidies to unintentionally encourage building homes in dangerous locations. 

In an article on The Hill, Poulton argues that a reauthorization of the NFIP should include a solution. National Flood Insurance Program Reauthorization Act of 2019, H.R. 3167, according to Poulton, “represents an admirable bipartisan effort and would be a prudent reauthorization of the NFIP.”

According to Poulton, the NFIP is a failed system that doesn’t address the risk faced by millions of Americans.

“The insurance is too inexpensive, and the NFIP and federal government don’t mandate that municipal governments take the right steps” Poulton told Insurance Business. “The problem with that is folks in any given locality believe they will never be flooded, hence they don’t buy flood insurance unless they’re forced to because they have a mortgage.”

Lawmakers are taking some steps to update the NFIP. For example, Senator Cindy Hyde-Smith of Mississippi is proposing an update to the Program, which aims to address the multiple extensions the NFIP has undergone with a long-term extension plan.

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. 

“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.

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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