Changes In Store For National Flood Insurance Program

A congressional committee approved a bill that would overhaul the National Flood Insurance Program. This move impacts more than five million homes and businesses that are sitting in flood-prone areas, according to a Reuters report. The program had recently expired, causing issues for anyone wanting to sell or buy property in a flood zone.  Here’s a look at the changes that would happen if it is approved by the House and Senate:

• It would continue the program for five years until September 30, 2015.
• New rate maps for flood zones would be delayed. This would help homeowners facing higher insurance rates.
• The bill would also overhaul the program’s administrators so it can function more efficiently.

Democrat Maxine Waters chairs the subcommittee working on this issue and says they have figured out cost-saving methods which is important since the program has carried massive debt since the destructive 2004 and 2005 hurricane seasons. “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,” Waters said in a statement according to Reuters. The House of Representatives Financial Services Committee approved the bill.

Insurance providers including Allstate, Travelers, Hartford Financial Services and Fidelity National Financial all have a big involvement in the National Flood Insurance Program. The program is administered by FEMA to provide flood coverage. They buy the coverage from about 90 companies that sell policies and collect premiums for the government. Those premiums are given to FEMA. “A long-term reauthorization of the NFIP is extremely important, especially for Americans living in flood-prone areas,” Blain Rethmeier, spokesman for the American Insurance Association, said in a Reuters report. The Independent Insurance Agents and Brokers of America, also known as Big “I”, issued a statement of support for the move. “The continued short term extensions of the NFIP have caused considerable confusion in the marketplace,” said Charles Symington, senior vice president of government affairs for the Big “I”. “We strongly support the Financial Services Committee’s efforts to pass a long term extension of this important program and hope that the full House and Senate will consider this legislation promptly.”