Congress urged to pass short-term NFIP extension as Harvey, Irma hit

The US Congress should pass a short-term extension to ensure that the National Flood Insurance Program (NFIP) is available to pay claims and process new policies in flood zones such as in Hurricane Harvey impacted areas, lobby group SmarterSafer said on Sept. 7.

The NFIP provides flood coverage to more than 5.2 million homeowners across the US but will expire on Sept. 30. The US Senate has proposed to extend the NFIP programme until Dec. 8, 2017.

“Hurricane Harvey wreaked havoc on the Gulf Coast and Hurricane Irma poses an imminent threat to countless other communities. Our first order of business must be to help those affected or in harms way, then ensure that people can rebuild their lives and property in smarter, safer ways moving forward,” SmarterSafer said.

Property losses from the flooding in Texas caused by Hurricane Harvey’s record-breaking rainfall will reach between $65 billion and $75 billion, according to estimates by catastrophe modelling firm AIR Worldwide.

The NFIP has so far approved 197,974 individual assistance applications. Total individual and households program payments approved reach $192.9 million. Harvey may produce at least $4 billion in flood claims, triggering the NFIP reinsurance programme, according to estimates.

Hurricane Irma, currently a Category 5 storm in the Caribbean, is forecast to reach Southern Florida as a major hurricane (Category 3+) by early Sunday, September 10th.

“In the wake of these disasters, SmarterSafer continues to support a reauthorization of the National Flood Insurance Program linked to substantive reforms. Congress may be required to pass a short-term extension to ensure that the programme is available to pay claims and process new policies in flood zones; however, any reauthorization should be linked to much-needed changes in the NFIP."

The NFIP has so far produced around $25 billion in debt to the Treasury.

“To ensure the program is sustainable in the future, Congress must pass a long-term reauthorization bill with crucial reforms to the NFIP to better protect lives, property, the environment and taxpayer dollars. This means allowing consumer choice by levelling the playing field for private sector competition, requiring updated property level mapping, investing in mitigation, and moving toward risk based rates coupled with mitigation assistance and means-tested assistance for low-income families. In addition, given that so much of the recent flooding has been in areas not deemed high risk, Congress should consider how to get more people to purchase much-needed flood coverage.

“The lessons from Hurricane Harvey should not be to slow down reforms that will strengthen the NFIP, but should be to speed adoption of these reforms so that the program remains viable for years to come.”

SmarterSafer is a national coalition of taxpayer advocates, environmental groups, insurance interests, housing organizations and mitigation advocates.