By a vote of 86-12, the United States Senate voted Tuesday to extend the National Flood Insurance Program [1] (NFIP) until November 30. The program's funding was otherwise set to expire at midnight, potentially disrupting housing markets in areas of the country prone to flooding.
The Senate's vote followed the passage of the measure in the House last week.
“It would have been bone-deep, down-to-the-marrow stupid to let the National Flood Insurance Program expire in the middle of hurricane season, and my colleagues realized that,” said Sen. John Kennedy (R-Louisiana). “With this extension in place, we can tackle long-term reforms. The last time we truly reformed the NFIP was never. It’s about time we did. The program needs to be affordable and sustainable.”
"We thank Senate leadership for extending the National Flood Insurance Program and providing four additional months of funding," said Jim Nussle, President and CEO of the Credit Union National Association [2], a national advocacy group representing credit unions. "It's vital that flood insurance premiums remain affordable so that credit union members in parts of the country where this type of insurance is required are not shut out of the opportunity to own a home."
SmarterSafer [3], a national coalition of environmental groups, taxpayer advocates, insurance stakeholders, housing organizations and mitigation advocates, released the following statement:
Though SmarterSafer is pleased that the House took action so that NFIP will not lapse, it is disheartening that our representatives have once again declined to enact much-needed reforms to NFIP, which has borrowed over $25 billion from U.S. taxpayers. We urge Congress to use the next four months to create a comprehensive legislative package that addresses ensures that the program better protects people in harm’s way, the environment, and taxpayers.
The necessary overhaul of the nation’s flood insurance program should include measures that promote mitigation against the threat of flooding; update and improve outdated flood-risk mapping techniques; ensure full communication of flood-risk data to communities and homebuyers; and ensure consumers can choose private flood policies. Recent studies [4] have found private insurance could offer cheaper premiums, giving Congress the opportunity to reduce premiums for a majority of policyholders nationwide—but Congress has not yet acted on this. These reforms will save taxpayers billions annually and contribute to a smarter, safer and more robust system of flood insurance that will better protect people and property in harm’s way.
A four-month extension doesn't provide a long-term solution to the flood insurance issue. The NFIP provides flood coverage for more than 22,000 American communities and was originally set to expire last fall. Although the House of Representatives passed a reform bill entitled the 21st Century Flood Reform Act, reform for the program then stalled in the Senate. Since then, the Senate has okayed a series of extensions for the program. Following the devastating effects of Hurricanes Harvey, Irma, Jose, and Maria, the NFIP was—and still is—deeply in debt. Congress has already agreed to forgive $16 billion in debt from the program.
“Affordable and readily available flood insurance is vital for the more than 20,000 communities across the United States that depend on the National Flood Insurance Program,” said Rebeca Romero Rainey, President and CEO of the Independent Community Bankers of America [5]. “A long-term reauthorization of the NFIP is needed to ensure coverage remains available to affected communities and to avoid further disruptions to the market.”
According to the National Centers for Environmental Information [6] (NCEI), natural disasters caused more than $300 billion in damages during 2017, a year that encompassed several damaging hurricanes, as well as wildfires and mudslides in California. The $309.5 billion total for 2017 set a new record, easily surpassing the previous U.S. annual record cost of $219.2 billion from 2005, which included Hurricanes Dennis, Katrina, Rita, and Wilma.