FEMA National Flood Insurance Program Reauthorization Needed
Agency officials Urge Congressional Action for Reauthorization
Release Date: April 23, 2012
Release Number: HQ-12-31
WASHINGTON, D.C. - The authorization for the National Flood Insurance Program is scheduled to expire on May 31 unless Congress acts, in advance, to reauthorize it. The program helps make federally backed flood insurance available to homeowners, renters and business owners in communities.
"Without reauthorization, the NFIP will be unable to issue new policies, renew existing policies, or modify policies to increase coverage on the existing policy." said David Miller, Associate Administrator for FEMA'sFederal Insurance and Mitigation Administration. "Reauthorizing the National Flood Insurance Program is the prudent thing to do. FEMA is urging Congress to reauthorize the NFIP and send a clear signal to citizens, communities, and private sector partners that the federal government will continue to support our nation's efforts to manage flood risk."
Floods continue to be the most common and costly natural disaster in the United States and the NFIP plays a key role in our nation's efforts to prevent and recover from flood disasters. The NFIP was created in 1968 to help lessen the financial impact of flood disasters on individuals, business, and all levels of government that would otherwise only be available through a limited pool of private insurance.
Under the NFIP, federally backed flood insurance is made available to homeowners, renters and business owners in communities that adopt and enforce floodplain management ordinances designed to reduce future flood losses by regulating new construction. The NFIP identifies areas of flood risk; encourages communities to implement measures to mitigate against the risk of flood loss; provides financial assistance to help individuals recover rapidly from flooding disasters; and lessens the financial impact of flood disasters on individuals, businesses, and all levels of government.
Without the NFIP in place, many individuals, families, businesses and local communities will find themselves left vulnerable to the devastating effects of flooding. Property owners in high risk areas, who would normally be required to purchase flood insurance to fulfill lending requirements will be unable to obtain affordable flood insurance.
The National Association of REALTORS estimates that a lapse in authorization jeopardizes an estimated 40,000 mortgage closings per month for individuals purchasing property mapped in a special flood hazard area. In addition, if the NFIP experiences a lapse in authorization, the cash flow into the program from premiums will diminish, and the NFIP may have to halt payment of claims for survivors who have recently experienced flooding, including those impacted by recent hurricanes Irene and Lee.
In recent years, a series of short-term reauthorizations and temporary suspensions of the NFIP have had a negative impact on the confidence in the program among citizens and stakeholders, including state governments, tribal governments, local communities, individual policyholders, mortgage lenders, and the private insurance industry. FEMA is asking Congress to support a two year reauthorization and affirm its commitment to citizens, communities, and private sector partners that the federal government will continue to support our nation's efforts to manage flood risk.
FEMA's mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.