US flood programme NFIP’s $16bn support no alternative to comprehensive reform

A new disaster aid package includes a provision to forgive $16 billion in debt held by the National Flood Insurance Program (NFIP), but lobby group SmarterSafer warns that the bill fails to incorporate critical reforms that put the programme on a sustainable path.

The NFIP is the primary way that most people in harm’s way can access insurance from flood losses in the US. However, the program is now over $30 billion in debt to US taxpayers, and the administration’s request seems to indicate that an additional $16 billion will be needed to pay claims from recent storms, according to an Oct. 12 SmarterSafer statement.

“Though the Administration requests $16 billion in debt forgiveness to pay claims, we believe Congress should not forgive the debt—which would mask the true indebtedness of the programme—unless comprehensive reforms to the program are made to ensure such deficits do not reoccur,” SmarterSafer said.

“We are pleased to see a number of critical reforms in the Administration’s letter including means tested assistance, removing barriers so that consumers have the choice of private flood policies, and a move towards additional transparency about flood risks. However, SmarterSafer believes that any debt forgiveness and any NFIP reauthorization must include comprehensive reform.”

SmarterSafer is a national coalition of groups that work on federal catastrophe policies.

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