By now it has become almost routine, every 6 months we hold our breath waiting for Congress to renew Flood Insurance. We are currently waiting for November 30th. Personally, I wish we could get a majority answer from Congress: Is the NFIP, National Flood Insurance Program, an insurance program or something else?
If it is an insurance program, it has broken all the rules of insurance and is a failure. If it is something else, then what is it? What does it do? Who does it do it for? And, how do we fund it?
For now, we are still saying the program is insurance. So, if that is the case then we obviously need a long term, insurance related fix that is sustainable. That will mean that people who get visited by floods on a regular basis will have to choose: relocate and get affordable premiums, or don’t relocate and don’t get NFIP.
It will mean NFIP mapping will have to be done correctly, assessing actual chance of flooding.
It will mean the private market must have a place. Like it or not, the government is unable to create, maintain and operate the system as a monopoly.
NAR and other stakeholders have been trying to persuade Congress to address this problem for years. Here are NAR’s advocacy bullet points:
- Reauthorize and gradually strengthen the flood program so it is sustainable for the long term.
- Encourage private market options to offer comparable coverage at lower costs than the current NFIP.
- Provide Federal assistance to high risk property owners; including guaranteed loans, grants and buyouts in order to build to higher standards or relocate, which will aid in keeping NFIP premiums affordable.
- More granular pricing of NFIP policies to better reflect the actual risk to a property.
- Improve flood map accuracy.
In 2017, H.R. 2874 , The 21st Century Flood Reform Act was introduced in the House of Representatives. NAR supported the reform measure and along with other stakeholders sent a letter of support and provided testimony before Congress. NAR has provided a detailed analysis of the bill as well.
Arizona has flooding and flood areas. Here is the link to the FEMA flood maps so your client can check their property or the property they are thinking of buying. And remember, your client’s insurance agent will have more details.
You can read more about National Flood Insurance at www.wemargad.org.