What’s Happened:
The National Flood Insurance Program (NFIP) is a Federal program enabling property owners in participating communities to purchase insurance as a protection against flood losses in exchange for State and community floodplain management regulations that reduce future flood damages. Participation in the NFIP is based on an agreement between communities and the Federal Government. If a community adopts and enforces a floodplain management ordinance to reduce future flood risk to new construction in floodplains, the Federal Government will make flood insurance available within the community as a financial protection against flood losses. This insurance is designed to provide an insurance alternative to disaster assistance to reduce the escalating costs of repairing damage to buildings and their contents caused by floods.
The NFIP has endured a number of problems in recent years including a mounting level of debt from payouts and a lapse in coverage in 2010. During this time, Congress has passed a series of short term extensions of the program. The House of Representatives passed a five year reauthorization of the NFIP in July 2011 which Congressman LoBiondo voted for along with over 400 of his colleagues from both sides of the aisle. Unfortunately, that bill has not been considered by the Senate to this date despite the need to avoid any lapse in coverage. Movement toward a bi-cameral agreement on a reauthorization bill has been very slow and concerns are rising again among NFIP participants as the expiration of the latest extension is on May 31, 2012 and the start of the Atlantic hurricane season the next day.
What’s Next:
The hope is that Senate and House leaders on the NFIP issue can find common ground to pass a bill that will give homeowners, local communities, banks, realtors, and insurers confidence in the program’s coverage and will help stabilize the NFIP itself. Whether this can be done before the May 31 deadline remains to be seen. If reaching an agreement in in this timeframe this is not possible, Congress could pass another short term extension to avoid a lapse in coverage as we saw last spring but Congressman LoBiondo believes that this approach is patchwork at best and keeps all local stakeholders in limbo awaiting a final decision.
Interested parties should contact their federal legislators to express their support for passage of a more permanent solution for the NFIP to ensure that our coastal and water-adjacent communities are protected from the dangers of floods. In the interim, the threat of another lapse in the program cannot be allowed to happen so, an extension must be passed by Congress to keep the program operating and policy holders covered against floods.
For more information on the NFIP and the status of the reauthorization, please contact Congressman LoBiondo’s Washington DC office at 202-225-6572 or our Mays Landing District office at 800-471-4450.
