Posted on 28 Apr 2010
A plan to extend the National Flood Insurance Program (NFIP) for five years was forwarded by the U.S. House Financial Services Committee to the full House.
Rep. Maxine Waters (D-CA) submitted HR 5114 recently to the committee, where she is a member for consideration after several short-term extensions of the program overseen by the Federal Emergency Management Agency (FEMA). In recent months, the program has expired with Congress having to reauthorize it retroactively.
“Without being reauthorized, the flood insurance program has been relying on a series of short-term extensions but recently it expired, leaving homeowners and prospective home buyers in affected areas unable to buy insurance,” Waters said in a statement.
If approved by the House, Waters' measure would still require action by the Senate and President Barack Obama.
The same committee also passed a measure sponsored by Rep. Gene Taylor (D-MS) that would add wind coverage to the NFIP, an effort that has failed previously in the Senate.
Waters’ office noted the increased reliance on the NFIP beyond properties in special flood hazard areas to areas of increased flooding to aid homeowners nationwide.
The proposed measure not only would extend the federal program to Sept. 30, 2015, but also would phase in actuarial rates and increases coverage limits.
“The maximum coverage limits for flood insurance policies needed to be increased because of inflation and higher housing costs,” Waters said. “However, the focus on NFIP should be on providing coverage for those vulnerable to natural disasters, not to subsidize the wealthiest Americans, so we are phasing out premium subsidies for second homes and vacation homes, which will save the program a lot of money.”
Several insurance organizations, including the Property Casualty Insurers Association of America, have supported Waters’ bill to find a long-term solution to the constant reauthorization of the flood program.
“We need a long-term, sustainable solution to the flood program,” David A. Sampson, president and CEO of PCI, wrote in a recent letter to the House committee. “Rep. Waters’ bill takes a responsible approach to making the NFIP more financially stable, providing the program with an important multi-year extension through 2015 and limiting additional federal exposure to natural disasters. The bill also works to increase local awareness of the devastating effects of flooding and the need to purchase flood insurance.”