In January, the House of Representatives held the first in a series of roundtables and hearings on the National Flood Insurance Program (NFIP). The program must be reauthorized before September 30, 2017 in order to keep selling flood insurance. Prior to the most recent reauthorization, Congress passed 18 month-to-month extensions and twice, the NFIP shut down, costing 40,000 home sales each month according to NAR research. The nation cannot afford to repeat that experience.
No legislation has been introduced to date but the goal is to develop comprehensive reform legislation by the end of 2016. Here’s a summary of NAR’s position on NFIP:
- NAR supports strengthening the long-term solvency of the NFIP. Any major reforms should be incremental, gradual and phased in over time to avoid major disruptions in communities or markets.
- REALTORS believe that private insurance alternatives can provide a complement to a strong and vibrant NFIP. Because NFIP is over charging some property owners, especially in the low-risk X zone, more opportunities exist for the private market to offer comparable coverage at lower cost. NAR supports the development of private market options.
- If a property is incorrectly mapped into the flood zone, either the owner must buy flood insurance or prove that the map is incorrect. NFIP should take advantage of advances in LIDAR and computer modeling in order to improve the accuracy of the flood maps upfront. Doing so will reduce the number of property owners who now have to appeal an incorrect map on the back end. At the same time, NAR does support streamlining the flood map appeal process and reimbursing homeowners when they win their appeal.
NAR would like to work with the Subcommittee to add a strong mitigation financing section to the 2017 reauthorization legislation. Providing the property owners most at risk with the ability to help themselves is a “win- win” not only for the owner (who becomes able to mitigate and keep their NFIP rate down) but also for taxpayers who will spend less on mitigated properties’ claims