Bill Extends National Flood Insurance Program Through September

The NFIP is the sole source of flood insurance for more than 5 million homes and businesses across the U.S. A lapse would have prevented the program from selling new policies and renewing current ones.

by Keith Magill, The Houma Courier, La. / January 2, 2020
A flash flood on a street in New Orleans resulting in extensive damage to homes and vehicles before Hurricane Barry, July 11, 2019. Shutterstock/EchoFree

(TNS) — Congress' latest budget bill will prevent the nation's flood insurance program from lapsing Tuesday as scheduled.

Instead, the bill extends the National Flood Insurance Program through Sept. 30.

The program is the sole source of flood insurance for more than 5 million homes and businesses across the U.S., including 500,000 in Louisiana, federal figures show. It covers nearly 29,000 homes in Terrebonne and Lafourche parishes with a combined value of just over $7 billion.

A lapse would have prevented the program from selling new policies and renewing current ones. The National Association of Realtors said up to 40,000 property sales per month, or about 1,330 home sales per day, were put on hold in 2010 after Congress let the program lapse for about a month. Without flood insurance, mandated for homeowners with mortgages, buyers were unable to close deals on houses.

A similar issue arose for a few days last December amid a budget battle between Congress and President Donald Trump that resulted in a temporary shutdown of the federal government.

"This bipartisan action by Congress ensures the National Flood Insurance Program will not lapse," Jon Gentile, vice president of government relations for the National Association of Professional Insurance Agents, said of the latest extension. "A nine-month extension also gives Congress time to work toward a long-term reauthorization of the NFIP."

Congress has passed more than a dozen short-term extensions over the past two years as members and special interests debate major reforms.

Proponents have argued for years that changes are necessary to both discourage people from living in flood-prone areas and to cut the program's debt to U.S. taxpayers, estimated at more than $25 billion. Some efforts have sought to bring the cost of insurance more in line with the risk a house will flood, reducing the burden on U.S. taxpayers.

But Louisiana lawmakers and others have consistently pressed Congress and the administration to ensure flood insurance remains affordable, especially for residents of coastal areas like Terrebonne and Lafourche.

FEMA, which administers the program, this fall delayed a collection of reforms called Risk Rating 2.0 for an extra year, through Oct. 1, 2021. The delay came amid criticism from Louisiana officials and others who said skyrocketing costs would make it impossible for many coastal residents and others in flood-prone areas to afford insurance.

The latest extension buys time to work out details of those and other proposed changes, officials said.

"We urge Congress to use the time afforded by this agreement to work toward sustainable, bipartisan solutions to programs like the NFIP, which protect millions of Americans every year," National Realtors Association Vice President Vince Malta said in a news release.

-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com.

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